The end of the financial year or EOFY, is a time where your business has to submit a tax return based on your income and expenses.
Let’s break down common terminology
EOFY period
Starts on 1 July each year and ends on 30 June the following year, also known as the Australian financial year.
Lodgement dates
Key dates to lodge various tax return types to the Australian Tax Office (ATO).
Tax return
A form that tells you how much tax your business needs to pay based on income, expenses and other tax information.
The type of tax return that your business needs to file to the ATO will depend on your entity structure.
Activity Statements
Used by GST registered businesses to report goods and services tax (GST), Pay as you go tax (PAYG), Pay as you go withholding taxes (PAYGW) and other taxes.
Before even lodging a return, you need to have your accounts ready
For the year you need to have:
- Recorded all sales.
- Recorded all expenses, such as bills, wages and other business expenses.
- Reconciled all your bank accounts for the EOFY.
- Keep documents stored within the file library in Xero.
- Make sure payroll and superannuation are up to date.
Take a look at this checklist for a more detailed list of tasks to complete at the end of the financial year.
Tip! EOFY is also a great time to chat to your advisor about your business structure and its suitability.
If you don’t have an advisor, contact us to help you out.
Points to be aware of when talking to your advisor
- Tax deductions or concessions you can claim for your business and what implication these may have on your taxes.
- Tax planning. It’s a way to look at your financial affairs and save you tax.
- Write off assets by deducting an amount from an assets value each year.
- Review any insurance cover especially if you’ve had any changes to normal operations during the year.
- Cash flow forecasting. Look at your businesses’ finances to see if you have enough cash to continue operating or grow your business.