With the end of another Financial Year fast approaching – here a few things to consider to maximize your planning for the year end.
Selling poor performing assets may enable you to bring forward a tax loss that can be offset against any capital gains made throughout the financial year.
Write off Bad Debts
To obtain a bad debt reduction, a debt must not be merely doubtful and must be written off as bad during the year of income in which the deduction is claimed. The debt must have been previously included as assessable income.
Trustees are required to make trust resolutions before 30 June in relation to how trust income will be distributed among beneficiaries.
For small businesses, you can bring forward operating expenses, such as rent, insurance, repairs and office supplies that cover a period of no more than 12 months.
Review your super strategies before year end to maximize your contributions caps, roll-over capital gains and review your eligibility for the spouse contribution tax offset and government co-contributions.
Write-off obsolete inventory
Slow moving, damaged and obsolete stock must be written off prior to 30 June to claim a tax deduction.
Claim self-education expenses
Self-education expenses such as course fees, textbooks, stationery etc. are tax deductible if your study has a direct connection to your work related activity.
Small business CGT concessions
Capital gains tax (CGT) concessions may apply to small businesses when an active asset is disposed of.
Employer super contributions
Employers must pay all superannuation guarantee contributions for employees before 30 June to receive a tax deduction in 2017 (note that the superannuation fund must physically receive the contribution by 30 June).
PAYG income tax instalments
Small businesses should review their PAYG income tax instalments and notify the ATO if expected profit will be higher or lower than previous financial years.
Home office expenses
Individuals operating businesses from home may be entitled to claim deductions for a number of expenses including room utilities, business phone costs, occupancy and motor vehicle expenses.
CGT roll-over relief
After 1 July 2016, small business owners have greater flexibility in changing the legal structure of their business. Small businesses can defer gains or losses that would otherwise be realized when business assets are transferred from one entity to another.