6 ACTIONS FOR YEAR END TAX PLAN

You have heard them all before but now is the time to act.

PAY A SUPERANNUATION CONTRIBUTION

To get the deduction the funds must be deposited into the members account in his Superfund. Payment just on or before June 30th won’t meet this requirement.

The maximum contribution is $27,500 but this must take into account SGC and salary sacrifice amounts. If your Superfund member’s balance is below $500K you can add any shortfall contributions from earlier years.

Employers make sure you pay your SGC in enough time to get into the members account by June 30th to obtain the deduction this year instead of in 12-month’s time.

 

WRITE OFF BAD DEBTS.

Bad debts are deductible once they you cease trying to collect them. This may not mean end of legal action, but it definitely means you must remove the debtor from your debtors’ system including their disclosure in the June 30th Debtors listing. Note Provision for doubtful debtors is therefore not a deductable expense.

 

DEFER INCOME

If work is unfinished or a service only partially completed, then it is not income. Whilst you can manipulate the time of completion, you cannot manipulate the time of invoicing.

 

BRING FORWARD EXPENSES

If you plan to incur business expenses in July, August or September consider making a contractual commitment for the goods in June to obtain the deduction in this year. Note the goods should have been delivered, even if you make an extended payment arrangement with your supplier.

 

100% ASSET WRITE OFF

There is still a small business concession to write off plant, equipment, furniture, and fixed assets at the rate of 100% instead of the notional depreciation rate.

In other words the asset write has the same treatment as the above noted expenses, however note, the assets must be installed and ready for use by June 30th.

 

SHARETRADING LOSSES.

If you are carrying investments at loss, in order to obtain a deduction, the loss must “realised” which means “sold”.  Note share trading losses are ‘capital’ in nature unless you are a trader. Note also. That the ATO will disallow any capital losses where an investor has engaged in what is known as a “wash sale”. A wash sale takes place when an investor sells a specific stock only to re-buy the same, where the sole purpose of a trade was to minimise tax.

The above actions are strategies designed to manage your taxation expense. Note however that the maximum tax rate is 47% and ask yourself if it is worth spending $1 to save 47 cents. All the above actions must be commercially smart, not for the tax perspective but from a common sense business perspective.

On a lighter note.

Did you read about the Melbourne restaurant where you go to get abused?

The food has to be and is good, however their point of difference is their rudeness to customers and now people attend the establishment for the understood fun of sarcastic abuse.

“Waiter- I didn’t order this”, …”well that’s what you’re having because we are out of the other stuff and the chef wants to use the last of the chicken….take it or leave it”.

It started during COVID with staff shortages, where the staff were genuinely being abused for various reasons and the restaurant owner thought he would reverse the status. The sarcasm is light-hearted and balanced but successful.

Things that work in business.

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