Tax planning and tax minimisation is a very important part of our role. As accountants we recognise the fact that business owners and individuals want to reduce their tax liability within the framework of the Australian taxation laws.
To achieve the best possible financial outcome you need to plan in advance and we encourage you to schedule a meeting in the last quarter of each financial year to assess your options. We have put together the attached brochure to highlight some year end tax planning opportunities but some specific issues for 2013 include:
Carry-Back Losses for Companies
If your company incurs a tax loss in the 2013 income year, you may be eligible to 'carry-back' the tax loss to offset against tax paid in the prior tax year. The carry-back is subject to some conditions including a cap of $300,000 in tax refund and is subject to available credits in the company’s franking account. (The legislation to introduce this concession had not been passed as at June 30, 2013 so we urge you to contact our office for further information).
Purchases of Depreciating Assets Including Motor Vehicles
For the financial year ended June 30, 2013 these rules apply for small business entities:
- an immediate write off of depreciating assets costing less than $6,500
- an immediate write off of the first $5,000 cost of any motor vehicle (with a total purchase cost of at least $6,500) with the balance of the purchase price being allocated to a depreciation pool and
- non-motor vehicle depreciating assets costing more than $6,500 are written off in a depreciation pool at the rate of 15% in the first year and 30% in later years.
Year End Stock Take / Work in Progress
If applicable, you need to prepare a detailed Stocktake and/or Work in Progress listing as at 30 June 2013. Review your listing and write-off any obsolete or worthless stock items.
Write-off Bad Debts
Review your Trade Debtors listing and write off all Bad Debts prior to 30 June 2013. Prepare a minute of a Directors’ meeting, listing each Bad Debt, as evidence that these amounts were actually written off prior to year-end.
Small Business Concessions - Prepayments
'Small Business Concession' taxpayers can make prepayments (up to 12 months) on expenses (e.g. Loan Interest, Rent, subscriptions) before 30 June 2013 and obtain a full tax deduction in the 2013 financial year.
Ensure that the Trustee Resolutions are prepared and signed before 30 June 2013 for all Discretionary (Family) Trusts. Please contact us for more information about these resolutions.
Some general tax planning opportunities include maximising allowable tax deductions in this financial year including:
- paying directors’ fees and any staff bonuses before June 30
- pooling depreciating assets
- scrapping of depreciating assets
- writing off bad debts pre June 30
- pre-paying expenses like interest, subscriptions, rent etc.
- pay superannuation before June 30
If you're looking for practical, down to earth business advice and tax effective solutions contact us today. We are ‘business and profit builders’ who enjoy working with ambitious business owners looking to accelerate their business success.
To take the next step we invite you to book a FREE, no obligation, one hour introductory consultation to discuss your business needs. You'll get practical business, tax, marketing and financial advice that could have a significant impact on your bottom line. To book a time, call us today on 1300 789 844 or complete your details in the box at the top of this page.