It’s tax time again somewhere.
Happy new(ish) financial year! On 1 April 2025, us Kiwis celebrated the end of the financial year ending 31 March 2025 and welcomed in the new financial year FY2026.
For those who file their own taxes, you will know that the due date for filing is 7 July. If you have a tax agent or accountant who does your taxes, then you will have until 31 March of the next year to file your returns. This means that for the filing of FY2025 taxes, you have until 7 July 2025 if you’re self-filing and 31 March 2026 if you have a tax agent.
Note that the advice in this article is more applicable to self-employed individuals or business owners. If your only source of income is salary, which is tax-deducted at source, you shouldn’t have to worry about this.
With the tax year just started, many of us are busy getting our financial things in order. So to kick off the article, let’s look at:
The start of the financial year will be the time to start worrying about putting together your tax information. Your advice may vary in this section, depending on whether you:
You have no accountant? No worries. Taxes can seem intimidating, but once you know what you’re dealing with, you’re all good. I will be writing this advice on the assumption that you have an accounting system of some sort. This can be a handy accounting software like PocketSmith, or a cobbled-together spreadsheet that you really, REALLY love to use.
Export your bank transactions from your online banking platform, starting from 1 April 2024 to 31 March 2025 (these dates are for FY2025, please adjust the dates accordingly based on your jurisdiction and tax year). Don’t just print off the bank statements. Yikes! We’re living in the 21st Century now!
Ideally, you want to export these transactions in a .csv or Excel format. Once you have your bank transactions downloaded, you can cross-check them against your spreadsheet or accounting software to ensure accuracy.
If you are using an accounting software with bank feeds activated (like PocketSmith), you can double-check that the balance on the account as of 31 March 2025 matches the balance shown on your software’s bank feed. A matching balance means everything is good. If it is off, then you’ll have to investigate why the balances are not matching. It can often mean a missed transaction or a wrongly coded one.
Start putting together your invoices. As a rule of thumb, focus only on large invoices worth more than $1,000 (adjust accordingly for your local currency). Smaller transactions are almost not worth keeping receipts/invoices for. Remember that your bank transactions also serve as proof of transaction if you ever (God forbid!) get tax audited.
You should also compile invoices that you’ve paid for using your personal funds for the business. These may not be captured in your accounting system. You can always add these expenses manually to your spreadsheet or software.
If you’ve purchased any fixed assets, you should add them to your fixed asset register. Depending on your jurisdiction, a fixed asset is typically a high-value purchase of a vehicle/plant/computer/machinery/furniture that is used in the business. You can’t claim these as a tax expense, but you can depreciate them for some sweet tax deductions.
As long as you know where your financial information is and you can retrieve those fixed assets receipts, you will be fine.
If you run your business or work on your business part-time from home, you can claim some home office expenses. Depending on which country you are from, you may be able to claim a portion of your personal living expenses as a tax-deductible business expense.
Home office expense is typically calculated based on the size of your home office. Different countries will have different rules about it, so be sure to check with your friendly local tax office as to what the rules are.
Depending on your tax jurisdiction, you may be able to claim additional tax deductions in your personal name before filing your taxes. For example, if you are in Malaysia, you can claim additional tax deductions on:
Unfortunately for us in New Zealand, we’re not so lucky, as any personal deduction we could claim in our name would have already been claimed through the business anyway.
Phewh! Once you’ve done all that, you can file your taxes. Feel free to talk to an accountant if you want an extra pair of eyes to review your accounts.
If you have an accountant, chances are that they have set you up on an accounting system of some sort. Once again, we are living in the 21st century, so if your accountant is still asking you to send them a shoebox of receipts, it may be time to change to a more modern accounting firm.
In most cases, an accountant will ask you to fill out what is known as a financial year-end form.
And that’s it. Fill out the form, focus on your business and worry about paying the taxes when your accountant tells you to. Easy.
Depending on how your accountant runs their business, they may ask you for all the fixed asset invoices for the previous financial year at the start of the new financial year. If your accountant also does bookkeeping for you, they may be more proactive and ask for these invoices as soon as they see the transaction come through.
A good accountant will have most of your financial information at their fingertips. If you feel like they’re hassling you for a lot of information and making your life more complicated at the start of the new financial year, then it’s time to get a new accountant.
A lot of the financial work at the end of the financial year will be related to ensuring you start the new financial year as smoothly as possible. For the end of the financial year, this advice is applicable to everyone, regardless of whether you have an accountant or not.
If you bill your clients using invoices (as opposed to cash sales), you will want to make sure that your invoices are paid up. This will affect the sales value that you report on your tax return (which will affect the overall tax you have to pay).
Since accounts are prepared on the accrual basis (meaning that invoices are recognised as sales when they are issued, not when they are paid). Unpaid invoices will add to your tax payable regardless of whether they’re paid or not. So, it’s better to get them paid!
If you have any old overdue invoices or invoices to clients that you know will never pay up, you need to write them off. Writing off unrecoverable invoices will lower your tax payable and is one of the easiest things you can do to lower your tax bill.
The end of the financial year is also a good time to tidy up your accounts. If you are using a spreadsheet, you should use this time to ensure good recording of your business transactions. If you are using accounting software, now is a good time to categorise those transactions you get on your bank feed! You may find this easier if you’ve set up rules for transactions on software like PocketSmith.
If you have a bookkeeper who does this for you, you should not have to worry about it. But if you don’t, you should get it tidy before the financial year ends so that you can start the new financial year on a fresh footing.
You should run a business forecast at least once a year. The best time to do that is at the end of the financial year. Once you’ve tidied up your accounts, you will have a better idea of how you did financially in the financial year just gone by.
Depending on your personal circumstances, your plans for the business and the economy, you can budget accordingly for the new financial year. For example:
Dee is in the last month of the financial year. She finds that her customer base has tripled in size during the financial year. For the coming financial year, she realises that she will need more staff to help manage the business. In her budget, she accounts for how much two full-timers will cost her. Using that, she sets her business some sales targets to meet to sustain the expenses of two full-timers.
Budgets are a guideline, so don’t feel too stressed about making sure you meet them. Remember to be flexible; things may change during the financial year, and you may need to tweak your budget to reflect these developments.
For those of you in New Zealand, I wish you happy new financial year! For those of you in other parts of the world, I wish you all the best in tackling your current financial year!
As long as you know where your financial information is and you can retrieve those fixed assets receipts, you will be fine. Be sure to take advantage of the time at the end of the financial year to chase up on overdue debts, tidy your accounts and plan for the future.
You can do this!
Sam is the director of SH Advisory, an online accounting firm for small businesses and startups in NZ. He is also the creator of The Comic Accountant, an internationally-read finance comic blog. With 15 years experience in accounting and finance, he loves sharing quality financial advice with small business owners everywhere. In his spare time, he likes to nerd out over the latest board game launches and great PC gaming deals online. If you need help with your small business and startup, Sam is the person you want to talk to!
