End of financial year checklist for sole traders

Late May to mid June: get current

• Reconcile to date. Upload every bank and card statement to the end of May and categorise anything outstanding. You cannot make good decisions in June on incomplete numbers.
• Estimate profit. With eleven months in, project the year. This tells you your likely tax and whether any of the timing moves below are worth doing.
• Check the GST threshold. If turnover is approaching $75,000, decide whether to register now or plan for it. See the $75,000 threshold.
• Chase overdue invoices. On a cash basis, money received by 30 June is this year’s income; money received in July is next year’s. Decide which you prefer and chase accordingly.

By mid June: super

Personal deductible super contributions must be received by your fund by 30 June, and funds can take days to process. Contribute by the middle of June, keep the confirmation, and lodge the notice of intent with the fund straight after. The deduction is lost if the notice is not acknowledged before you lodge your return. See sole trader super contributions.

Before 30 June: timing decisions

• Equipment you were going to buy anyway. If it is under the instant asset write-off threshold and installed and ready for use by 30 June, it is this year’s deduction. Ordered but not delivered does not count. See instant asset write-off.
• Prepaid expenses. Small businesses can claim prepayments for services of 12 months or less, such as insurance or a software subscription paid annually in June.
• Bad debts. If you report on accruals and an invoice is not going to be paid, write it off in writing before 30 June to claim it. On a cash basis there is nothing to write off.
• Stock. If you hold trading stock, do a stocktake on 30 June or use the small business concession if the change in value is under the ATO’s threshold.

Do not spend money for the deduction alone; a deduction only returns your marginal rate of the cost.

Records to finalise

• Home office hours for the whole year, if you use the fixed rate method. If the diary has gaps, fill them now from your calendar while you can still remember.
• Vehicle: odometer reading on 30 June, logbook still valid (12 weeks, less than five years old), receipts for running costs if using the logbook method, or a trip record if using cents per kilometre.
• Receipts for anything over the small-purchase threshold attached to the transaction.
• Contractor payments totalled by contractor for TPAR if you are in a covered industry.
• Private use of any business asset noted so the business percentage is right.

July: the last BAS and the pack

Upload the June statements, review the categorisation and lodge the April to June BAS by 28 July. Then export the year’s pack: profit and loss, transaction list by category, GST summary, asset purchases, and the apportionment records. FlowFi produces this in one click in PDF, CSV, MYOB or Xero format. If you use an accountant, send it in July; they are quieter than in October and you get their attention.

August to October: lodge

• 28 August: TPAR if required. See TPAR explained.
• 31 October: tax return if you lodge yourself (next business day if the 31st is a weekend). If a registered agent lodges for you and you were on their list by 31 October, the due date is usually much later.
• After lodging: check your notice of assessment against your estimate, and check whether the ATO has entered you into or adjusted PAYG instalments for the new year.

Reset for the new year

Set the tax set-aside percentage for the new year based on what you just learned. Start a fresh home office hours record on 1 July. If your logbook is coming up to five years old, start a new 12-week one. Archive last year’s exported pack somewhere you will still have in five years. And book the weekly ten minutes that makes next June easy.