As the end of the financial year (EOFY) approaches, it's crucial for businesses utilising SoftPOS (Software Point of Sale) solutions to capitalise on available tax deductions. Leveraging digital payment systems not only streamlines transactions but also offers tangible benefits when it comes to tax time. Here's how you can maximise your deductions:
Mobile Devices and Accessories: If you've purchased a smartphone or tablet primarily for business use, including SoftPOS transactions, you may be eligible to claim the full cost as an instant asset write-off, provided the asset is under the current threshold and installed ready for use by 30 June. Accessories like styluses or card readers, as well as monthly data plans used for business purposes, are also deductible. Ensure you only claim the business-use portion if the device is used privately as well.
Software Subscriptions: Ongoing fees for SoftPOS platforms, accounting software, and other digital tools are claimable as operating expenses.
Prepaying up to 12 months of business expenses, such as software subscriptions, insurance, or rent, before 30 June can allow you to bring forward deductions into the current financial year. This strategy is particularly beneficial if you've had a profitable year and wish to reduce your taxable income. (ITP Accounting Professionals)
Digital payments and electronic receipts simplify the process of tracking and substantiating business expenses. Ensure you maintain all invoices, receipts, and transaction records from your SoftPOS system to support your claims in the event of an audit.
Instant Asset Write-Off: If your business has an aggregated turnover under $10 million, you may be eligible for the instant asset write-off, allowing immediate deduction of eligible business assets (including mobile devices and POS equipment) costing less than $20,000, provided they are first used or installed ready for use between 1 July 2023 and 30 June 2025. (Australian Taxation Office)
Small Business Tax Offset: Review your eligibility for the Small Business Tax Offset, which can reduce your tax payable by up to $1,000 per year for sole traders and partnerships with turnover under $5 million.
Claim all business-related expenses, including utilities, internet, advertising, and professional fees. Even smaller costs, like software subscriptions or mobile data, can accumulate to significant deductions over time.
Acquire and install any new devices or software before 30 June.
Prepay eligible expenses (subscriptions, insurance) for up to 12 months.
Maintain digital records of all business purchases and payments.
Separate business and personal use for accurate claims.
Consult a registered tax agent for tailored advice and to ensure compliance.(cashflow-manager.com.au)
By strategically leveraging digital payments and technology-related expenses, SoftPOS users can maximise their EOFY deductions and strengthen their bottom line. Seek professional advice from your accountant.