Are you wondering whether you'll be paying too much tax this financial year? Minimising your tax where legally possible is a big part of your current and future wealth creation, not to mention that it's a smart thing to do.
If you're unsure about how you're traveling this year, don't leave your tax planning to the last minute. Consider getting a set of interim reports prepared by our office, which will show you exactly how your profit and income levels are tracking. If it's looking like you'll have a handsome tax bill after June 30, then now is the perfect time to arm yourself with information and do something about it. A set of interim accounts can be prepared to the end of March 2018, which then gives you a further three months before June 30 to get organised to make any changes necessary. We sometimes hear that the cost of the interims puts people off having them prepared, but in many cases, the cost is a minor expense if we can save you thousands in money you would otherwise be giving to the ATO.
The main tips to consider in the lead up to tax time are:
1. Consider superannuation contributions as a great tax deduction. For those under 75 and still working, a concessional contribution of $25,000 is available, and you'll only pay 15% tax on that amount of money, compared to your potentially higher personal tax rate.
2. Is your depreciation schedule up to date? If you've got business assets you can be claiming depreciation on, make sure these are listed and all up to date in order for your accountant to maximise any claims.
3. Prepay interest. If you've got borrowings, you may be able to pre-pay an amount of the interest, thus claiming that expense in the current financial year.
4. Consider making a charitable donation. Not only will you be able to claim the expense against your income, you'll also be making a difference for others.
5. The $20,000 instant write off is still with us, but not for long. If you buy an asset and it costs less than $20,000, you can immediately deduct the business portion in your tax return. The $20,000 threshold applied from 12 May 2015 and will reduce to $1,000 from 1 July 2018, so get in quick if you're thinking of buying something.
6. Look to write off bad debts if you won't be getting them back in the current financial year.
7. Pay your staff super on time if you'd like to claim the deduction for this. If you happen to leave the last quarter's payment until the next financial year, you won't be able to claim it.
So put some planning in place this year and get in early. We're here to help with all of your tax planning needs, and we'd love to help you where we can. To minimise your tax bill this year, give us a call today.