potentially save thousands by getting your end of year tax sorted.
Its getting closer to the end of financial year and a perfect time to discuss your financial situation with your accountant.
You have the right to arrange your financial affairs in order to keep your tax to a minimum – this is often referred to as tax planning, or tax-effective investing.
Tax planning is legitimate when you do it within the letter and the spirit of the law. However, some arrangements attract the ATO’s attention especially tax schemes so please seek professional advice. (ATO)
Now at Astro we love this time of year it’s strategy time. So the big question is what can you do to save tax and maximise your refunds legally? Although every client is different and you should seek a tailored solutions there are some common areas to ensure you’re on the right track to tax saving and good financial management.
- Keep your receipts – The biggest problem we see people not keeping correct records, they are literally throwing away money! We encourage you to download receipt bank, its an app that stores all your tax deductions in the cloud – We are currently offering this for $11 per month (which is at a huge discount to online subscriptions) and of course its tax deductible – Its a win/win.
- Postpone your incomes – Its easy If you have a business, but no so easy if you have investments or employment income. Businesses can postpone invoicing until July, this will reduce earnings for the current financial year and save your tax bill. For this to work in your favour, you need to ensure you have analysed your cashflow and can afford to wait for payment.
- Bring forward deductible purchases – You maybe thinking of upgrading or buying a new item in the next 3 months if so you could buy these items before 30 June the costs will be a deductible in the current financial year. Common examples of purchases prior to June 30 include: a new phone, equipment upgrades, laptop computers, safety equipment, new uniforms etc.
- $30,000 instant asset write off for small business (2019 tax year only) – This is the quickest way to make huge tax savings. The government have now allowed small business to claim an instant deduction for assets purchase up to $30,000 – Now thats a potential tax saving of up to $14,100 for you if you’re on the highest tax bracket. Examples are normally cars and business equipment.
- Pay your super early – For business owners with employees, pay your super before 30 June and claim it as a tax deduction in the current year.
- Repairs on rental properties – Get your handyman on the tools in June and get all those little jobs completed so you can claim a deduction against your rental property income. Remember though its needs to be a repair and not a capital improvement.
- If you operate a family trust, ensure your trust prepares a distribution minute – This is vital if you act as a trustee for your family trust, you need to prepare a trust minute before 30 June (or before depending on your trust deed). You need to ensure profits distributions are minuted. If your minute is prepared after 30 June or not at all the trustee will be assessed for the tax at a rate between 34.5% – 68%. Don’t let this be you.
These are many more areas to consider including capital gains, stock write offs and bad debts to name a few. Just being aware of what you are entitled too can make all the difference to your tax situation.
Late May or early June is perfect for this type of planning so get your accountant on the job (which is also a tax deduction) now so you can implement changes before 30 June.
At Astro we are experts in business, property and tax – Its time to save tax and get your finances in order – call today to get started.