The end of financial year is less than 2 weeks away and here I have summarised the VJC Top year End tax tips that you should have already considered and implemented or rush to do so.

These all would have been discussed in your quarterly reviews, the recent Q3 one in particular, so before June 30 make sure you have considered the following steps that reduce your tax payable:

 

THE POPULAR DEDUCTIONS!

  1. PAY AND PRE-PAY EXPENSES: Of course paying (or accruing) expenses will reduce your tax payable, this includes paying Super and in particular the SGC before June 30. In some cases prepaying insurances, leases and subscriptions can be worthwhile. This is more attractive given the company tax rates are reducing next year 1%.
  2. BOOST SUPER, SAVE TAX AND CREATE WEALTH!
    Make super contributions up to the contributions caps (CC) 25K this year. Take advantage of the lower tax rates in super and the wealth creations benefits, beware not to exceed the 25K cap in total contributions including SGC. PLUS don’t forget the ability to bring forward unused CC from previous years is applicable this year.Personal deductible super contributions are a more flexible deduction.
    Government superannuation Co-contribution
    Superannuation balance splitting
    Spouse super contributions (a tax rebate for super paid for low income spouse).
    3. WRITE OFF BAD DEBTS and claim a deduction, if you have determined they are not collectable and have some proof this is a prudent step to clean up your books also.
    4. DON’T BRING FORWARD YOUR INVOICING! Deferring income and bringing forward expenses where possible and legal will reduce your tax payable.

THE MOST POWERFUL DEDUCTION!

  1. Purchase assets for your business, take advantage of the continued immediate 100% asset write off.
  2. There is also a loss carry back measure to take advantage of this year.

THE WISE STEPS!

  1. Spend from your wish list, all those items you were going to do like business agreements, business or asset restructures etc. now may be a good time to invest in these and claim the expenses and reduce your profit.
  2. PAY LESS CAPITAL TAX! A capital loss will reduce a capital gain, consider selling your under-performing investments. Apply the 50% discount if the asset has been held for more than 12 months

THE OLD FAVOURITES!

  • Income split to lower income spouse.
  • Pay your salary bonuses and management fees.
  • Repay non-deductible debt first.
  • Bringing forward of deductions and prepaying or deferring income.

OTHER MATTERS TO BE AWARE OF: 

  • Look out for OSR issues like Payroll and Land tax.
  • Repay Div 7A loans or make your loan repayment. Don’t forget to implement a written loan agreement if needed.
  • Trust distributions resolution must be effective as at the 30th June.
  • Beware of Personal Service Income (psi) issues

 

DON’T FORGET!

  • Think about your long term plan and make decisions with this in mind.
  • The use of the correct entity is crucial, now and in the future.
  • Lodge your tax return early if expecting a refund and invest the money or repay non-deductible debt

There are many more deductions and rebates available depending on your situation

  • Beware of Part IVA consequences of acting for solely a tax benefit, if it looks too good then it probably is too good, don’t break the law.
  • Beware of acting without advice

Please call if you would like to discuss any of the above and the application to your own situation

General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC WM accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement with VJC WM for this purpose.