2015 Business Tax Planning Strategies
The end of the 2014/15 financial year is fast approaching, so now’s the time to review what strategies you can use to minimise your tax.
- Small Business Asset Depreciation
If your business is a Small Business Entity (turnover less than $2 million), then the following tax concessions apply:
- Instant asset write off – the Act temporarily increases the threshold below which small businesses can claim an immediate deduction for the cost of assets from $1000 to $20,000. The increased threshold of $20,000 applies from 7.30pm (AEST), on 12 May 2015 until Friday 30 June 2017.
- Depreciating assets valued at more than $20,000 will be depreciated in one pool at a rate of 15% in the first year and 30% in future years
- Concessional Superannuation Caps
The concessional superannuation cap for 2015 is $30,000 per year for persons under 50, and $35,000 for persons over age 50. Do not go over this limit or you will pay more tax! Note that employer super guarantee contributions are included in these caps. Where a contribution is made that exceeds these limits, the excess is taxed to the fund member’s account at an effective rate of 46.5%. In order to claim a tax deduction in the 2015 financial year, the super fund must receive the contribution by 30 June 2015.
- Employee Superannuation Payments
To claim a tax deduction in the 2015 financial year, you need to ensure that your employee superannuation payments have CLEARED your business bank account by 30 June 2015. For any last minute superannuation payments, we recommend that you arrange for a BANK CHEQUE made payable to your employee super fund prior to 30 June 2015. Also, check that your payroll system is now paying the required 9.5% rate (up from 9.25%) from 1 July 2014.
- Defer Income
Where practical, defer issuing further invoices and/or receiving cash/debtor payments until after 30 June 2015.
- Bring Forward Expenses
Purchase consumable items BEFORE 30 June 2015. These include stationery, printing, office and computer supplies.
- Repairs & Maintenance
Make payments for repairs and maintenance (business, rental property, employment) BEFORE 30 June 2015.
- Defer Investment Income & Capital Gains
If practical, arrange for the receipt of Investment Income (e.g. interest on Term Deposits) and the Contract Date for the sale of Capital Gains assets, to occur AFTER 30 June 2015. The Contract Date is generally the key date for working out when a sale occurred, not the Settlement Date!
- Motor Vehicle Log Book
Ensure that you have kept an accurate and complete Motor Vehicle Log Book for at least a 12-week period. The start date for the 12-week period must be on or before 30 June 2015. You should make a record of your odometer reading as at 30 June 2015, and keep all receipts/invoices for motor vehicle expenses.
- Investment Property Depreciation
If you own a rental property and haven’t already done so, arrange for the preparation of a Property Depreciation Report to allow you to claim the maximum amount of depreciation and building write-off deductions on your rental property.
- Private Company (“Division 7A”) Loans
Business owners who have borrowed funds from their company must ensure that the appropriate principal and interest repayments are made by 30 June 2015.
- Year End Stock Take / Work in Progress
If applicable, you need to prepare a detailed Stock Take and/or Work in Progress listing as at 30 June 2015. 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 BEFORE 30 June 2015. 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 2015 and obtain a full tax deduction in the 2015 financial year.
- Trustee Resolutions
Ensure that the Trustee Resolutions are prepared and signed BEFORE 30 June 2015 for all Discretionary (“Family”) Trusts. Please see us for more information about these resolutions.
Contact us TODAY before the 30 June 2015 deadline for assistance to reduce your tax!
Email: email@example.com or call Julian on 0408033696
This information is of a general nature and does not take into account your individual needs and objectives.
Please do not act on any information before seeking advice from a qualified Accountant and a licensed Financial Planner.