Tax planning for 2018
With the 2017/18 end of financial year fast approaching, it’s time to consider opportunities to maximise your potential savings and minimise your tax liabilities. It’s important for small business owners to be aware of what measures are available for minimising their tax bill for the 2017/18 year. Here are our top ten end of year tax planning tips our Accounting team have put together to help you be prepared:
- The $20,000 immediate write off for depreciating assets purchased by small business is still available until June 30 2018 subject to a turnover threshold of less than $10 million.
- Bring forward into this year the purchase of business costs such as repairs and maintenance or prepay occupancy costs such as rent and utilities and interest on loans.
- Defer the invoicing of clients until early in the new year provided your cash reserves are adequate to cover your operations.
- Claim the $540 rebate by making a superannuation contribution of up to $3,000 on behalf of your low income spouse whose income is less than $10,800.
- Avoid unpaid loans at year end to directors, shareholders or associates. Without a formal loan agreement, they can be construed as dividends.
- Review the collectability of your trading debts and write off any debts you failed to recoup during the year despite your best efforts. Debts treated as bad are more than doubtful and can no longer be pursued for collection in any manner or arrangement and must be written off before the end of the financial year.
- Review stock on hand and write off any obsolete, missing or damaged trading stock to minimise your closing stock value.
- Make sure that any beneficiaries you intend distributing profits to from your trust are eligible under the Trust Deed.
- Speak with your employer and top up your before tax concessional contribution salary sacrifice to the $25,000 threshold.
- Review your fixed asset register against the physical assets of your business and write off any plant or equipment that was given away or dumped during the year.
And lastly, please remember to keep proper ordered records should you need to substantiate your claims. For extra comfort, we offer competitive pricing on tax audit insurance to protect you from the costs of unexpected ATO audits. Contact our office to speak with one of our tax specialists. We look forward to seeing you in the new year.
Disclaimer: This article contains general information only. The information contained in this article is not designed to be a substitute for professional advice as such a brief guide cannot consider and cover all individual needs, objectives, circumstances and conditions applying to the law as it relates to these items mentioned in this article. No responsibility can be accepted for errors, omissions or possible misleading statements or for any decisions or actions taken as a result of any material in this communication. Appropriate expert advice should always be considered from a professional financial adviser prior to making any financial decisions.
Past Monthly Focus Topics
Here’s the season to be saving! – December 2017
Is your Estate Planning in place? – November 2017
What comes first: the property or the loan? – October 2017
Total and Permanent Disability Insurance (TPD) – September 2017
Income Protection – August 2017
Super and Concessional Contributions – July 2017
Federal Budget – May 2017
First Home Owners – April 2017
Pension Limits – March 2017
Non-Concessional Super Contributions – February 2017
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