The Fitness Zone

Tax prep checklist – what business owners need to know for 2022

Jun 09, 2022 | by Network

Don’t run around like a headless chook come tax time! Start preparing now for the transition to a new financial year, with this tax checklist for business owners and the self-employed from financial adviser Helen Baker.

Tax season is almost upon us again. The more prepared you are, the better the outcome will be – both for you and your business. This tax checklist will help you break down the task into manageable portions:

Good recordkeeping

Your tax position is only as good as the records you keep.

Lots of business owners still do their tax and recordkeeping on paper. Yes, it saves you paying for and learning to use digital software, but at what cost? It’s so easy to lose paper records. And printed receipts on that glossy paper quickly fade.

No record means you’re not able to accurately track your GST, your deductions, even your depreciation. Those losses in unclaimed credits and refunds could wind up costing you far more than the price of the software.

Budget review

The 2022 Federal Budget unveiled a number of measures for small business. Be sure you know the latest measures and what you are entitled to, as your tax situation could have changed significantly. 

Also consider your own position under the low- and middle-income tax offset: depending on how much you earn, it may be wise to postpone or bring forward your own pay to a different tax year to meet the eligibility requirements.

Deductions ready to claim

This sounds self-explanatory – but you’d be surprised just how many deductions go unclaimed. Many of these fall into two types: small expenses and depreciation.

People often think small expenses, such as a coffee meeting with customers or a few stationery items here and there, aren’t worth bothering about – but they quickly add up! If it’s a legitimate business expense, it can be claimed. Would you rather you keep those funds or the tax office?

Meanwhile, depreciation is complex and often gets overlooked because busy business people aren’t sure what they’re entitled to claim. Company vehicles, computers and other electronics are the most obvious. But think more widely about your business assets – office furniture, air conditioning, the fit-out of your fitness studio and so on.

And if you obtain professional financial advice, you may be able to claim that too!

Employee entitlements up to date

The hustle and bustle of everyday life in business may mean you have some employee entitlements to catch up on.

Superannuation Guarantee (GS) contributions is the first point of order – you may accrue penalties if this goes unpaid. Things get messy if they are overdue once we cross into a new financial year. And tax time is also when employees are most likely to look at their super and notice missed payments. So be sure this is up to date.

Check in too on other entitlements while you’re at it, such as annual and long service leave, to ensure you have those covered.

Sales splurge avoided

EOFY sales can be an unnecessary money pit. Firstly, are the items really discounted? Shop around to ensure you’re getting a real saving. But more importantly, consider whether you actually need it.

Buying stuff you don’t need just for the tax deduction is like buying a car because it looks good – it’s an unnecessary expense, depreciates in value, and you have to find somewhere to store it. Eventually, you may need to sell it (likely at a loss) to get that all-important space back.

Self-entitlements sorted

Don’t forget to look after yourself too.

Are you paying yourself properly? Do you have outstanding director loans? Have your expenses been divided between business and personal?

Remember to claim your home-based work expenses – such as a dedicated home office from where you do your accounting/strategy/social media/other work activities.

And have you paid yourself superannuation? Other employees receive 10 per cent in super on top of their salaries… you are entitled to this as well.

The old line ‘the business is my retirement fund’ is a huge personal risk, so consider diversifying your retirement assets and extracting your superannuation out of the business. It’s far easier to manage in smaller, regular amounts with the pay cycle than a big lump sum. Plus, you’ll have longer to benefit from the compound growth!

Click here for more information on what fitness professionals can claim on tax this year.

Helen Baker

Helen is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at onyourowntwofeet.com.au 

Network
Network is an education subscription service that offers a broad range of upskilling courses for fitness and wellness professionals. Established in 1987, Network has played a pivotal role in the continual evolution of the fitness industry. Note from the author: Where Certificate III in Fitness or Cert III/cert 3 is mentioned, it refers to SIS30315 Certificate III in Fitness. Where Certificate IV in Fitness or Cert IV/Cert 4 is mentioned, it refers to SIS40215 Certificate IV in Fitness. Where Certificate IV in Massage or Cert IV/Cert 4 is mentioned, it refers to HLT42015 Certificate IV in Massage Therapy. Where Diploma of Remedial Massage is mentioned, it refers to HLT52015 Diploma of Remedial Massage.

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Disclaimer: Where Certificate III in Fitness or Cert III/cert 3 is mentioned, it refers to SIS30315 Certificate III in Fitness. Where Certificate IV in Fitness or Cert IV/Cert 4 is mentioned, it refers to SIS40215 Certificate IV in Fitness. Where Certificate IV in Massage or Cert IV/Cert 4 is mentioned, it refers to HLT42015 Certificate IV in Massage Therapy. Where Diploma of Remedial Massage is mentioned, it refers to HLT52015 Diploma of Remedial Massage.

Important Information: As of 9th November 2021 SIS40215 Certificate IV in Fitness and SIS30315 Certificate III in Fitness have been replaced by SIS40221 Certificate IV in Fitness and SIS30321 Certificate III in Fitness. A transition period applies to enable currently enrolled students to fulfil their study goals and complete their qualification. The transition period concludes on 8th November 2022. If you have not completed all the requirements by this date you will be transitioned and enrolled into the replacement qualification SIS40221 Certificate IV in Fitness and SIS30321 Certificate III in Fitness. View the SIS40221 Master Trainer Program Flyer here. View the SIS30321 Certificate III – Fitness Coach Flyer here.