tips to minimise your tax bill
- by Jeff Smit
G
et your calculators ready – it ' s end of financial year time
again . To help minimise your business tax bill , here is a list of things you should check with your accountant before the end of June .
1 . $ 20,000 asset write-off – The $ 20,000 asset write-off scheme is ' the big one '. Any small business can immediately write off the full value of an asset in this financial year rather than over the life of the asset . So , if you ’ re thinking about buying a new scan tool or hoist do it before the 30 June deadline so the full asset amount can be offset against your taxable income for this financial year .
2 . Pre-pay expenses – If your turnover is less than $ 2,000,000 per year you can claim a deduction on prepaid expenses such as rent , interest , insurance or training courses . So if profits are up , maybe prepaying and getting the deduction in advance could be beneficial .
3 . Write off bad debts - Review your debtors listing and write-off any debts that may have gone bad so you can claim the tax deduction this year . That said , be sure to exhaust all avenues of getting paid and document the efforts you have made to recover the money .
4 . Write off obsolete stock - Do a stocktake with a view to writing off any obsolete or damaged stock . It also helps to ensure you don ' t have dud stock hanging around or have too much money tied up in inventory .
5 . Ensure your wages are correct and superannuation payments are up to date - When superannuation is paid late it ' s not tax deductible ( there is a 28 day exception here ). That means if there are corrections made to wages after year end or if some contractors were overlooked , it ' s likely you ' ll miss out on those precious tax deductions . Not only that , but you may also be up for interest charges and administration fees to get everything brought upto-date . Avoid this by reviewing all wages and contractor payments in June to make sure everything is paid up .
6 . Personnel super contributions - If you ' ve got some spare cash , top up the super contributions for yourself to get up to the concessional contributions cap ($ 30,000 for those under 49 years
of age and $ 35,000 for those older ). Considerable tax savings can be made because contributions into your super fund are taxed at 15 %, rather than your top marginal tax rate on those earnings .
7 . Employee bonuses – The end of the financial year is a good time for small businesses to sign off on bonuses . The actual bonus does not have to be paid before 30 June but there must a commitment in writing that it will be paid .
8 . Pay tax debts on time - Once you have finalised your tax bill , pay it on time . From 1 July 2017 the ATO will be reporting businesses with tax debts of more than $ 10,000 that have been outstanding for more than 90 days without a payment arrangement , to a credit reporting bureau . This could mean a black mark against your credit report for up to five years . Have a chat with your tax accountant before 30 June to ensure that your business is in the best possible tax shape .
The place to start is tatbiz . net . au / resources
26 CAPRICORN IGNITION JUNE 2017