As end of financial year is fast approaching, it’s time to talk tax planning. While tax talk is usually boring, here at Dean Robin we like to spice things up and a sure fire way to get excited is to reduce your tax. All of our clients have access to proactive tax position planning before 30 June.
Are you getting all the information about what you can do to improve your tax position? Here are some easy considerations.
Simple considerations for tax minimisation;
Ensure you have brought to account/submitted invoices received for business expenses from creditors by 30 June, even if they are not physically paid by then. Although we may/may not be able to claim GST in that period (until paid) they are still tax deductible for income tax purposes.
Consider the timing of invoices you issue to your customers in case any should not be invoiced until after 1st July, which will put that income into the next financial year.
Consider any bad debts that should be written off, and they can be credit noted prior to 30 June. This will reverse the income brought to account, and also adjust any GST back too.
Where you have a tax debt due, deferred lodgement of your 2018 tax return, effectively deferring the expected liability – can be prepared early so that we know the exact position, and then deferred for lodgement up to 15th May 2019.
Increasing your contributions into superannuation – Superannuation contributions up to $25,000 for self employed people can be deducted if paid prior to 30th June 2018. This is on the condition that less than 10% of your income is from employment. Alternatively as an employed person, you can salary sacrifice up to the $25,000 limit, taking into account your employer’s compulsory 9.5% already paid for the financial year. All age based differences in deductible super contributions (concessional contributions) has been removed effective for the 2017-18 financial year.
General strategies and other considerations for tax minimisation (cash required);
General forms of tax minimisation for this year will include;
- Acquiring business assets costing less than $20,000 before 30th June 2018 as they can be fully expensed (being an “SBE” small business entity)
- Acquiring business assets costing over $20,000 before 30th June 2018 as we can apply a full 15% depreciation on the cost (not pro rata for period of ownership). We only recommend doing this where there is a need for the equipment as of course cash flow also should be considered.
- Pay any income protection insurance premiums annually prior to 30th June 2018, if you’ve been paying them monthly.
- Pay super for your employees for the April to June quarter before 30th June 2018. Super is deductible in the financial year it is physically paid, as long as it is paid on time.
- Maximise general personal deductions against any employment income – logo uniforms, courses, tools/equipment for employed work etc.
- Make donations to registered deductible gift recipients (DGRs)
Here at Dean Robin, we’ve got you covered. We’re experts in business and tax compliance and we’re all about being proactive for our clients, to ensure efficiency and client satisfaction.