Buy a business asset that costs less than $20,000
If you purchase a business asset and it is ready for use before June 30 2017 you could qualify for an instant deduction
For more on the small business tax write off visit https://www.integrityclients.com.au/news/20000-small-business-tax-break-explained/
Prepay expenses this financial year
Eligible small business can claim deductions this year if they pay taxable expenses in advance such as next year’s professional subscription, insurance policy or accounting fees.
Write off bad debts
If you have customers that are unlikely to pay their accounts in the new financial year, these accounts should be written off as a bad debt before June 30 so a deduction can be claimed. Have a record of the debt and the actions taken to recover the debt to ensure you meet tax office requirements.
Review your inventory
Check to see whether you can write off or write down the value of any of your stock to claim a deduction.
Small business restructure roll-over
Small businesses under $2m in aggregated turnover have the option to restructure their affairs without incurring any capital gains tax liability.
This may allow an entity the opportunity to genuinely restructure to a corporate entity to take advantage of a lower tax rate. Alternatively, the restructure can be reversed from a company back to a sole trader/partnership without any capital gains tax liabilities.
Delay sales to next financial year
Subject to cash flow considerations and anti-avoidance rules, income could be deferred to the following year, particularly if:
– Income in the following year is likely to be lower, or
– Tax rates for the following year are expected to be lower
High income earners will also have to factor in the effect of the 2% “budget deficit levy” applying in 2016/17. This is the final year in which the temporary budget repair levy will apply.
For cash businesses – deferral of income can be risky, especially when the deferral puts them outside the ATO small business benchmarks
When possible defer:
– Contract dates for the sale of CGT assets
– Insurance recovery claims
Ensure that contributions for the June quarter are paid to a complying fund by June 30 2017 (otherwise the deduction is delayed until 2017/18).
Do not leave payment processing until late June as funds have different processing cut off dates. Check with your funds
April to June 2017 quarter contributions must be paid no later than 28th July 2017
Cap limits of concessional contribution a member can make before June 30 2017:
– $35,000 for members aged 49 or over
– $30,000 for members aged 48 or under
In the 2017/18 financial year the cap will be cut to $25,000 for all ages
For more on the changes to superannuation as of July 1 2017 visit https://www.integrityclients.com.au/news/superannuation-changes-july-1-2017/
Sources: Commonwealth Bank, Finder, ATO
For any advice on these issues please contact the Integrity One office
Phone: (03) 9723 0522
Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
This article is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Integrity One Planning Services Pty Ltd is a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 (which is the holder of AFSL 225051). Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. We recommend that you seek personal advice from an advisor prior to implementing any of the information contained in this publication.