Have you planned for 30 June?

It's very easy to get so caught up in the day to day, that we forget we have the ability to improve our tax outcomes with some consideration and planning. If you have not already done this, consider the following before the 30th June rolls around.

Simplified depreciations for small business

The small business entity turnover threshold has been increased from $2 million to $10 million effective from 1 July 2016. Importantly this expands the access to simplified depreciation rules including immediate deductibility for asset purchases of less than $20,000.

General expenses that you prepay

A small business entity (turnover up to $10 million) can prepay expenses before 30 June 2017 and obtain a tax deduction in this financial year provided they have an eligible service period of 12 months or less. Examples of expenses that may be suitable for prepayment are interest, rent, insurances etc.

Superannuation Deductions

Make your super contributions into your respective super fund so it clears before the 30th of June.

Under 50s concessional cap, for the 2016/2017 year: If you’re aged 48 years or younger on 30 June 2016, you can contribute up to $30,000 in concessional contributions for the 2016/2017 year.

Special over-50s concessional cap, for the 2016/2017 year: If you’re aged 49 years or older on 30 June 2016, then you can contribute up to $35,000 a year in concessional contributions for the 2016/2017 year.

Note: From 1 July 2017, the general concessional contributions cap will drop to $25,000 for all ages.

Income Received in Advance

If you have received income in this financial year and you have not completed the service or product you can defer the income into the next year to match the income and completion of the transaction. So you can defer the income into the 2018 financial year.

Accrued expenses

If you incur an expense before 30 June you can claim the deduction this year even if the amount is not yet paid. So this is a bring forward of an expense/investment to the year you committed.

As an aside, an example of accrued expenses, for those of you that are seriously considering attending the next Global Business Camp to be held on the 30th July 2018 – 1st August 2018 you can register now, pay $500.00 per registration and get the full deduction this financial year.

Bad Debt Write-off

If you have people that owe you money (debtors) and they have gone bankrupt or you know you will not be receiving the money you can actually write off the amount as a bad debt and therefore not pay tax on that amount.

Inventory write downs

Similar to that above (bad debt write-off) if you have stock that is old, damaged, obsolete you can actually write it down to what you feel it is worth now. This once again should be done before the 30th of June as this will reduce your stock and in turn your profit for the year and your tax.

If you feel you need further advice on the above, please contact me or my team at Indigo Financial. We will be able to provide you with more detailed answers to any specific questions you have.