It’s that time again. We have a new budget to consider, and the end of the year is fast approaching. So below we’ve highlighted a few tips that could help maximise your tax deductions, and you still have time to implement them!
Bring forward your expenses
If you know you are going to have to spend money on tax deductible items in the near future, it may be an idea to spend that money now as opposed to waiting until the new year. Bringing forward your expenses means you get that tax benefit immediately, rather than waiting another year to take advantage of spending money on disposables, consultants and various other expenses.
If you are in a small company, then the benefit is even greater, as the tax rates drop as of 1st July 2017. This means that if you spend now, the benefit of that tax deduction is greater this year, than it will be next year. You get your benefit sooner, and it’s a little bigger.
Before the budget announcements in early May, it was expected that small business owners would no longer be eligible to write off equipment purchases over $1,000 as of 1st July 2017. That has since been extended, meaning there is less need to rush, but if you are close to making a decision on buying plant and equipment, it may still be worth it to buy now. Again, if you are in a small company, there are extra cash benefits to spending in this financial year as opposed to next year.
Write off your bad debts
As a business owner, this is an unfortunate part of business. In order to make the best of a bad situation, when you know a debt is bad, you should write it off. If you can do so before the end of the financial year, at least you won’t potentially pay tax on money you are unlikely to receive. Reduce the pain by writing off that debt.
Restructuring your business
Whilst not necessarily saving you tax, restructuring at this time could save you administration and accounting costs. A change in the middle of a financial year doubles the work you will need to do at the end of the year to lodge your returns. If your accountant has been telling you that will need to eventually change structures, now may be the most cost effective time to do so.
Moving funds into superannuation is starting to become harder. Deductible contributions are reducing, and over the last year there has been a lot of debate about how much you can get into superannuation over your working life. Rules may change further soon. If you have plans to utilise super, you don’t have long before new rules will affect long term plans. It may be time to talk to your advisor/accountant.
At Carbon, we have a team that can help you take advantage of the end of the financial year, giving you an advantage in the new year.
If you want tailored advice, specific to your circumstances, contact our team for a complimentary chat. There’s still time to make changes that could save you big at the EOFY! Call us on (08) 9446 8588.