Year End Tax Planning Tips
Please consider the following legitimate tax minimisation tips and if you would like to discuss your options contact us as soon as possible before 30 June so there is time to implement any strategies.
Note: this is not intended to be a comprehensive list and your individual circumstances need to be considered prior to implementing as certain conditions may need to be met.
This comes in many forms and works to either reduce the amount of tax payable or at least delay the need to pay your tax for another year. Tax minimisation works most effectively if your taxable income in subsequent years is likely to be substantially different to the current year, for example:
- You will be retiring and not earning as much income going forward
- You have a one off irregular income amount like a large capital gain occurring
Current year tax can be minimised by:
- Delaying Income
- Consider the timing of deriving your income
- Do you need to raise a bill for incomplete work
- Bringing forward deductible expenses or losses
- Could you benefit from triggering a capital loss before year end
- Do you have repairs that need doing – could these be brought forward pre 30 June
- Prepaying next year’s expenses
- Certain expenses can be deductible when paid, even if this is before they are due. Note, this applies to certain expenses only so please call to discuss.
- Effective trust resolutions to allocate income to lower marginal rate tax payers
- These need to be in place before 30 June
- Making superannuation contributions
- Contributions need to be processed by the fund before June 30 to be deductible
- New rules are coming into effect from 1/7/2017 – you need to be prepared, so please contact us as needed
OTHER YEAR END CONSIDERATIONS/ISSUES
- Stock valuation – ensure stock is counted and any obsolete stock is written off
- Bad debts – consider if there are there any that can be written off before 30 June
- Immediate asset write off – if you are a small business assets up to $20,000 can be written off immediately as a tax deduction if acquired before 30 June
- Compulsory super contributions – these need to be made before 28 July, however to be deductible in the current year they need to be received by the fund by 30 June.
- Car expenses – record your odometer reading at 30 June, and prepare a new log book if more than 5 years old.
- SMSF Pensioners – have you ensured you have met your minimum withdrawal
- Substantiation – ensure you have records to substantiate all expenses you intend to claim
Disclaimer: This guide contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.