Get organised: NH+ Associates

Happy end of the financial year 2022.

It’s certainly been a year full of contrast – boom for some, whilst others have had challenges to navigate: supply chain issues, employment shortages, and a lack of tourists. The end is nigh for tax year 2022, and what better way to finish than being super organised with your end-of-year tax checklist.

Nicole Hague of NH + Associates has put together these tips to consider:

  1. Upload all invoices and documents relating to bank transactions in Xero – In transactions, there is a box where you can upload invoices and contracts to support payments. You can also add documents under FILES in Xero, so your accountant can view them, and save time asking more questions down the track.
  2. Bank and loan Statements – Uploading statements for each bank/loan account
    to support the balance as at 31 March 2022 is imperative. Upload these into Xero/Files and you will be one step ahead of
    everyone else.
  3. Stock-take as at 31 March 2022 – Ensure you have conducted a physical stock-take and compared it to your inventory system. If these don’t match, there could be inconsistencies that need investigating such as: theft, admin errors, fraud, or damage. Consider whether obsolete or old stock could be discounted. Remember, the higher your stock levels, the higher your profit, so double check to ensure that your stock on hand figure looks correct.
  4. Asset threshold lowering – Review your asset expenditure. Identify assets (valued up to $1000) that can be expensed (written off in the year that the transaction occurred). Anything over $1000 will be capitalised (added to the Fixed Asset Schedule and written off by a percentage each year).
  5. Earn over $180,000 a year? – You might have extra tax to pay if you have not been paying more during the year in provisional tax. The marginal tax rate applies to all employment income over $180,000 a year. It includes extra pay earned in the course of employment, such as bonuses, back pay, redundancy, and retirement payments. It is timely also to review dividend payments.
  6. Keeping subsidy records crucial – While Covid-19 related wage subsidies and resurgence support payments are non-taxable, keep accurate records of staff members and business expenses it was applied to, to ensure non-taxable treatment applies and in case of future review by MSD.

Having your Xero reconciled and tidy, with supporting documents will keep your accountant’s questions to a minimum, allowing them to prepare your annual financial statements and income tax returns effectively and efficiently. For more tips, go to the resources page on the website.

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