Eight end of financial year tax strategies for your business

Eight end of financial year tax strategies for your business

Here are more tips for the end of financial year planning that may improve your financial position.

There are many things that need to be considered when preparing your business for the end of the financial year – tax concessions being one.

To help improve your businesses financial position in preparation for 30 June, we’ve outlined eight tax considerations for small, medium and large businesses.

If you consider your business to be a small business and are unclear as to whether it is entitled to tax considerations and concessions, check back to our small business blog where we’ve outlined the criteria you need to satisfy to qualify as a small business entity.

1. Review your capital expenditure

If you have any upfront costs involved in purchasing fixed assets, these costs can be brought into this financial year thereby lowering income rather than taking the cost in the new financial year.

Check the instant write-off threshold as you may be able to write-off completely rather than depreciating.  Faster write-offs can translate to cash flow benefits.  Your tax bill could be reduced by bringing forward the deduction.

If you are thinking about buying or upgrading equipment, doing it before 30 June might be a good option.

2. Consider doing a stock-take

If you have stock in your business, now is a good time to value it, as it is part of your assessable income.

3. Write off bad debts

If you decide to claim for bad debts, these need to be written off before the end of the financial year.

4. Consider paying bonuses

If you are planning to pay bonuses, these may be able to be written down and deductions claimed this financial year even if you plan to pay after 30 June.

5. Claim lease repayments

It’s important to make your repayments before 30 June to ensure a deduction can be claimed.

6. Deduct any office expenses

You should purchase any necessary office equipment and expenses before the end of the financial year so you can claim a deduction, and perhaps utilise tax concessions on depreciating assets. Make sure you have kept receipts for purchases made throughout the year.

7. Make your superannuation contributions now

Make sure any superannuation contributions are made no later than 30 June so you can claim the deduction in this financial year.

Required super guarantee (SG) contributions for employees of the business should be made by no later than 28 days after the end of the quarter to ensure that the contribution is deductible and no SG charge becomes payable to the Australian Tax Office.

8. Make sure your log books are up to date and represent the car’s business use

If you have a car that you use for business purposes, check that all of your motor vehicle log books satisfy the substantiation requirements.

There are a number of other ways you can look at reducing your income tax liability at tax time and the Australian Tax Office is the most trustworthy resource to do your research at this time of year.

For more information on your business and tax click here.

Things to know before you Can

This document has been prepared by Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139 (Commonwealth Financial Planning), a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Commonwealth Financial Planners are representatives or authorised representatives of Commonwealth Financial Planning. Information in this document is of a general nature only and is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Commonwealth Financial Planning, its related entities, agents and employees for any loss arising from reliance on this document.  This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial planner before making a financial decision.