1. Superannuation
Do you have any employees whom you are paying superannuation? Superannuation is not tax deductible until it has been paid, accordingly, you must pay before 1 July 2015 to be able to claim your superannuation tax expenses and be able to reduce your income tax bill.
2. Bad Debts
For businesses that account on an accruals basis, now is the time to go through your debtor list and consider writing the bad debts off. Bad Debts are tax deductible and can therefore be used to reduce your taxable income.
3. Expenses
Need a new desk? Laptop nearly had it? As a result of this year’s federal budget, small businesses can receive $20,000 as an immediate tax deduction for assets. This applies to businesses which turnover no more than $2million per year.
This does not mean that you will receive a cheque from the ATO for $20,000; it means that this amount reduces your income and therefore reduces the tax you will need to pay at the end of the tax year.
If there is a capital purchase you are considering buying, this incentive is a great way to help your cash flow.
4. Salary sacrificing your Bonus into superannuation
If you are due for a bonus before the end of the year, consider salary sacrificing some or all of it into Super. Superannuation contributions are taxed at 15% compared to the top marginal tax rate of 45%.
5. Plan for next year
Make an effort to review your cash management processes and review your business or investment structure. Consideration should be given as to whether your existing structures provide asset protection and are tax-effective.
If you would like any assistance getting your affairs in order, please contact our Superannuation and Tax law team. We also know a few great accountants and financial planners that we could recommend. Get in touch with us today.
Please note: the tax rates, thresholds and end-of-financial-year deadlines referenced in this article were correct as at the 2015 financial year and may have changed since. This article is general information only and does not constitute legal, financial or tax advice. For current thresholds and how they may apply to your situation, please contact Southern Waters Legal or speak with your accountant or financial adviser.
