End of Financial Year Tax Tips
- Small Business Entities can get an immediate deduction for assets whether new or second-hand which cost less than $30,000 each (including GST if your business is not GST registered, excluding GST if GST registered) if purchased before 30 June
- Check your trading stock at 30 June & write off any obsolete stock items
Small Business Entities are allowed to estimate the value of trading stock at 30 June. You will need to record how you estimated the value of your stock.
You can choose not to conduct a stocktake, if there is a difference of $5,000 or less between:
- the value of your stock at the start of the income year
- a reasonable estimate of the value of your stock at the end of the year
If you choose not to use an estimate, you will need to conduct a stocktake and account for the changes in the value of your stock
- Are you Selling an asset that is subject to Capital Gains Tax?
For Capital Gains Tax Purposes, the Contract Date is key!
Talk to use before 30 June if you are considering selling an asset as you may be eligible to access Small Business Concessions
- Write off Bad Debts before 30 June. The ATO will allow a deduction by considering action taken to determine recoverability including reminder notices sent, legal action taken, time & the debtors circumstance
- Complete & pay for repairs & maintenance you’ve been putting off before 30 June
- Pay Superannuation Guarantee Contributions for your employees before 30 June to ensure they are tax deductible.
Pay the Superannuation well before 30th June 2019 because tax deductibility depends on the date the super fund receives the contribution, not the date the payment leaves your bank account!
- Small Business’s are able to claim an immediate deduction for prepaid expenses where the payment covers a period of 12 months or less. Expenses that might fit this strategy are insurance and rent
- Single touch payroll (STP) is a reporting change for employers. It means employers will report payments such as salaries and wages, pay-as-you-go (PAYG) withholding and super information to the ATO directly from their payroll solution at the same time they pay their employees. Employers must make sure they are STP compliant before the ATO deadline.
- Defer income and bring forward expenses
- If possible, defer issuing further invoices until after 30 June
- Defer receipt of investment income until after 30 June
- Purchase consumables such as marketing materials, stationery and office supplies before 30 June
- Physically pay a donation to a Deductible Gift Recipient before 30 June to get a tax deduction
- Motor Vehicle Expenses – Maximise your Motor Vehicle claim by completing a valid log book
- Telephone, Internet and Home office expenses – You should have a diary you have created to work out how much you used your equipment, home office and phone for business purposes over a representative four-week period
The Information contained here is informative and educational in nature and is not intended to be advice. You should obtain professional advice about how these concepts may apply to your circumstances before you make any decisions or take any action.