Tax Time for Your Building Business – The Essentials!

If you’re in the building trade, tax time may not be your favourite time of year. The sheer number of items which may show up on your books, in various degrees of cost and levels of frustration, is hardly appealing. The critical thing to know about this taxing time of year, however, is that there are better ways of doing things.

Please note: This information is not intended to be construed as taxation advice. Content of this blog is for general information only. You should be guided by your taxation professionals regarding specific tax return requirements.

Building Materials, Costs, and Tax

Obviously, your costs in building materials form a part of your tax return. The problem is that “building materials” can be such a truly huge range of things. You can fill a spreadsheet with the miscellaneous bits and pieces you acquire during the year, easily.

There is an easier way to manage this issue:

1. Information sources: Your suppliers are your instant source for any information you need about your purchases during the year. They can also provide any required references for audit purposes, bookkeeping, etc.
2. Acquisitions: Your acquisition records can be reworked in to instant access sources for information, notably including the extra purchases which seem to always accompany sourcing materials, and often get lost in translation when doing tax returns. (These extras can add up to a LOT of money, so it’s well worth checking them out.)
3. Plant and equipment costs: These are basic costs built in to every balance sheet, but it’s easy to forget or leave out service calls, parts, and basic common-sense acquisitions. Most builders are so busy that they don’t have the time to manage the details and extra expenses.
4. Transport costs: You know it costs you a lot to just get onsite. How much? Are you properly checking your transport costs? This is money you’ve spent that can be useful on your tax return.
5. Insurance: This is a legitimate, if sometimes worrying, expense. You’re required by law to have your insurance. If, for some reason, you’re not thinking about it all the time, it is a very important entry on your tax return.

Not Sure about A Tax Issue?

Tax issues can be confusing. Talk to your tax accountant, or the Australian Taxation Office, about your issues before lodging a return if you’re not sure about anything. You MUST have a clear understanding of your tax rights and obligations. If there’s a problem, you need to solve that problem before you get hit with what might be a major fine. The ATO can provide general guidance and help you to understand the compliance requirements related to a matter. Make sure you do fully understand what’s required for your tax return, and don’t worry about asking a lot of questions when you need a lot of answers.

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