Proper planning of your taxes can save you a lot of money. With the financial year coming to an end now is a great time to start thinking about your strategy for next year. Here are some tips on ways you could save on tax next year:
Purchase plant and equipment or motor vehicles
If you are considering purchasing some new business equipment it is a good opportunity to do so.
Small businesses can now claim a $6,500 immediate write off for items of plant and equipment used in the business (e.g. tools, office equipment, computers)
Small businesses can also claim a $5,000 immediate deduction is available on the purchase of motor vehicles. The remainder of the motor vehicle value is depreciated at 15% in the first year and then 30%.
Bring forward necessary expenses
If you have some expenses that you would normally pay in July, why not bring them forward and pay in June, entitling you to a tax deduction this financial year.
Write off bad debts
Review your trade debtors and write-off any old debts that are unrecoverable
Consider making additional superannuation contributions
If your cash flow allows, consider making additional contributions to super. Super is taxed at a concessional rate of 15%. Be careful not to breach the contribution cap of $25,000.
Review depreciation schedule
It is always worthwhile to review your depreciation schedule on at least and annual basis, writing off obsolete or scrapped plant and equipment.
New legislation means trustees must give consideration to how they will distribute trust profits prior to 30 June of each year.
Review business structure
It’s a good time to review your business structure and implement any changes before the new financial year.
Scott is a Senior Accountant at Insight Accounting advice. He has a Bachelor of Commerce and is a registered tax agent. Scott’s experience covers all facets of accounting but he specialises in small businesses and SMSFs.
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The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.