Tax Planning & Strategies for Business
Now is a good time to check you have made all the decisions necessary to minimise your income tax.
This is not an exhaustive list but a tax return checklist for businesses is available here.
For more contact your accountant at Forsyths.
Purchase consumable items such as stationery, office, and computer supplies along with fuel, fertilizer, equipment lease payments, and bring forward any repairs which may need to be done shortly.
If you are eligible for the small business concessions, you can make prepayments up to 12 months in advance. It is important that you contact your accountant at FORSYTHS to see if it is the right decision for your circumstances.
- Defer Income.
If possible defer issuing further invoices or receiving cash payments before 30 June.
- Employee Superannuation.
To claim a tax deduction you need to ensure your employee superannuation payments have CLEARED your business bank account by 30 June.
- Family Trusts.
Trustees must prepare and sign the trustee resolutions BEFORE 30 June.
- Write Off Bad Debts.
These debts can be written off which removes them from your taxable income. They can be bought in again after the 1 July to enable you to continue with action and recover the debt. If you have not been paid then it is probably better that you don’t pay tax on the income until you have received the funds.
- Company Loans.
If operating through a company it is important that any loans to Directors or related parties have a proper loan agreement, repayment schedule and the appropriate principal and interest payments made before 30 June. SIGNIFICANT PENALTIES can apply and if in doubt get it sorted with your accountant from FORSYTHS.
The concessional cap for 2016/17 is $30,000 for persons under 49 and $35,000 for persons aged over 49. DO NOT GO OVER THIS AMOUNT AS SIGNIFICANT PENALTIES WILL APPLY.
- Farm Management Deposits.
This can be an effective way for primary producers to transfer income from a year with a large profit to a year in which profit is much lower. Effectively you can decide on the tax rate you wish to apply to your primary production profits.
- Stock Take.
Now is the time to write off any stock that is damaged or obsolete. Rather than pay tax on the item it is better to remove it from the system. You can always bring it back on to the books later if you do find a buyer/use for the items.
Again, every business is different which is why you need to talk to your accountant at FORSYTHS and discuss these strategies and others that may be suited to your personal circumstances.