Tax Laws are complex and are constantly changing. In Business, there are always bright prospects for you to increase your tax refund and minimize your liability.
Some of the strategies mentioned below are designed to be implemented immediately and, by using them effectively, you will save on tax this year. If you are interested in putting together a tax plan or if you are just looking for a few extra tips, consider the following simple strategies:
WRITE – OFF BAD DEBTS
Review your Trade Debtors listing and after taking every possible action to recover the debt, you are able to delete it from your debtor’s listing and write off all Bad Debts before the financial year end. The key is to make sure that the debt exists, and if not, physically write it off prior to 30 June. This will ensure that you don’t pay tax on income you didn’t actually receive.
SCRAP ASSETS
Review your asset ledger and write off all assets that have been scrapped or which have outlived their useful economic lives.
OBSOLETE STOCK
Obsolete trading stock with no value can be written off and a tax deduction claimed this year. In situations where stock has become obsolete at year-end (e.g. fashion clothing), the business may elect to adopt a lower value than actual cost, replacement cost, or market selling value.
REPAIRS & MAINTENANCE
Make payments for repairs and maintenance (business, rental property, employment) BEFORE 30 June and claim a deduction in the respective Financial Year. Also, A deduction can be claimed for repairs undertaken and billed by 30 June 2014 but not paid until the next income year.
SUPERANNUATION
To claim a tax deduction in the financial year, you need to ensure that your employee superannuation payments have CLEARED your business bank account by 30 June, and to avoid the non-deduction of Superannuation Guarantee Charge for the default; you need to deposit superannuation by the 28th of next month from the end of quarter i.e. 28th January, 28th April, 28th July and 28th October.
PERSONAL SUPERANNUATION
You can claim a deduction for personal superannuation contributions if your salaries and wages income is less that 10% of your total income.
SALARY PACKAGING
Salary packaging is an Australian Tax Office approved way of restructuring your income. It enables you to buy a range of everyday items out of your pre-tax salary rather than your after-tax salary – leaving more money in your back pocket. This enables employees to take advantage of the potential benefits of flexible salary packaging, by maximising the tax effectiveness of their income. This enables employees to take advantage of the potential benefits of flexible salary packaging, by maximising the tax effectiveness of their income.
