Tax planning strategies before the year ends

There are several strategies that businesses can review and implement before 30 June to reduce their tax liability and improve their financial position. Here are some things to consider:
Prepaying expenses

Businesses can review their expenses to ensure they are maximising their deductions. This includes reviewing and prepaying expenses such as rent, insurance, subscriptions, and professional fees.

 

Defer income

Deferring income can help businesses reduce their taxable income in the current financial year and defer taxes to the next financial year. This can be done by delaying the invoicing or receipt of income until after 30 June.

 

Superannuation contributions

Superannuation contributions are tax-deductible if paid (and received in the super fund) before 30 June. Consider making additional superannuation contributions up to the concessional contribution cap.

 

Stocktake

Conducting a stocktake before year end can help businesses identify obsolete or slow-moving inventory and write it off as a tax deduction.

 

Depreciation

Businesses can claim tax deductions on depreciating assets by reviewing and updating the effective life of business assets.  Also review for any instant asset write off opportunities for small businesses.

 

Bad Debts

Businesses should review the accounts receivable ledger at 30 June to see of there are any bad debts that can be written off.

 

Charitable donations

Donations to registered charities are tax-deductible and can help businesses reduce their taxable income.

 

Capital gains and losses

Businesses can offset capital gains with capital losses.  Reviewing capital gains positions and disposing of any investments that have generated capital losses to offset the gains made before year end can reduce the taxable income. Also consider deferring the sale of assets with capital gains until after year end to defer taxes.

It is important to consult with a qualified tax professional to ensure that the tax planning strategies are appropriate for your specific business and comply with Australian tax laws and regulations.

About Ritchie Cruz

Ritchie has 20+ years experience in Public Practice, being trained as a Chartered Accountant in one of the largest 2nd Tier accounting firms in Australia. Experience also includes working in management positions in Medium to Large ASX Listed Companies. Recent experience includes working as a Group Financial Controller in medium size business going through the ASX listing process. Ritchie can offer big company management and reporting experience, to small & medium businesses.

Ritchie has a passion for small business start ups, helping clients grow from humble beginnings. See our small business start up page to see how your business can benefit.