Some tax strategies to consider before 30th of June 2013
With June 30, 2013 fast approaching here are some tax strategies for you to review and consider for yourself and your business:
- Pay Compulsory Super – pay your superannuation guarantee contributions for the June quarter before June 30, 2013; these payments are tax deductible in the financial year that they are paid.
- Delay Issuing Invoices – consider delaying issuing invoices for work that are close to June 30 and issue them in July, thereby deferring the tax until the next financial year (2013/14).
- Small Business Instant Write-Off Of Asset Purchases – from July 1, 2012 if you are an eligible small business you will be able to obtain an instant write-off for equipment purchased to $6,500 (GST exclusive). So if you have any equipment purchases you are planning under $6,500 next financial year, you may want to consider bringing those purchases forward before June 30, 2013.
- Accelerated Deduction for Motor Vehicles – from July 1, 2012 if you are an eligible small business you will be able to obtain an accelerated deduction for the purchase of that motor vehicle, whether it be brand new or second hand. If the vehicle costs less that $6,500 it can be written off completely. If it was greater than $6,500 then the deduction is $5,000 plus 15% of the remaining amount.
- Delay Capital Gains Tax – if you sell investment shares or rental properties, remember that for Capital Gains Tax (CGT) purposes the tax is based on the contract date and not the settlement date. Bare in mind that any investment assets sold and ownership was greater than 12 months they may be eligible for the 50% discount tax incentive.
- Stock Take Preparation – know what your stock take obligations are so you have time to prepare for and carry one out.
- Bad Debts – must be written off in your accounts before June 30, 2013
- Declare Any Bonuses or Director’s Fees Before June 30 – you are not required to pay these by June 30, but the company must be committed to the payment via a director’s resolution in order for these to be deductible.
- Prepaid Expenses – eligible small businesses can claim expenses prepaid up to 12 months in advance but is generally limited to expenses below $1,000.
- Net Medical Expenses Tax Offset – if possible, when there are considerable out of pocket medical expenses paid during the financial year, group them together to the higher income earner to try and satisfy the annual threshold for the net medical expenses tax offset.
- Donations – if you make donations to deductible gift recipients and a tax deduction can be claimed, group those deductions to the higher income earner.
- Trustee resolutions – the ATO requires that all trustees who make beneficiaries entitled to income by way of a resolution must do so by the end of an income year, June 30, 2013. This resolution will determine who is to be assessed on the trust’s taxable income. This needs to be done June 30, 2013 and cannot be done retrospectively.
- Are Your Books Up To Date? – if not, use this time to get them in order so that your reconciliations are ready for your end of financial year requirements. There are great accounting software both traditional desktop and online versions now readily available and user friendly (including reliable bookkeeping services) that can ensure that this process is as stress free for you and your accountants.
- Business Structures – as tax considerations extend well beyond merely compliance obligations, you should take the time to ensure that your tax affairs are structured in the manner that best suits your needs. The right tax structure will provide the solid foundation on which you can build the rest of your business; and access those certain tax incentives when needed. The structure in which your business is set up will depend significantly on your needs. Each possible structure offers its own advantages and disadvantages. If you think the structure in which you currently run your business may not be the best structure for you, the New Year is a good time to discuss alternative structures with your tax advisor.
- Take Time To Reflect – it is important to review and reflect on your end of financial year results, even if you’re happy with your results. Did your business achieve what you set out to achieve during the last 12 months? If not, where can your business improve?
All of the above matters are important but if your books aren’t kept up to date it can be difficult to determine your true financial position and consequently struggle to determine and execute the applicable tax strategies before year end. One way we believe that you can stay on top of your bookkeeping for your business is by using Xero. Xero is the world’s leading online accounting system that is able to deliver real time information about your business at any time and anywhere.
The way it does this is that Xero is in the clouds and is accessible via any internet browser on your laptop, tablet or smart phone; and its accessibility and ease of use makes it simple to keep your data up to date. Through daily automatic bank feeds it enables you to process bank statement items on a daily basis, giving you a day-to-day live view of your business’ financial position. Xero’s interface is both beautiful and super user friendly, and surprisingly it makes bookkeeping fun. Xero will also save your valuable time so that you can spend less time on administration and more time on important aspects of your business and your life.
If you are looking for someone to provide you advice and systems to help your business stay on top of your tax issues and help your business grow then look no further, switch to Rush & Associates today!
CONTACT US TODAY on 07 3839 8869 or email mail@rushassoc.com.au to speak to one of our staff members.