End of Year Tax Planning

Maria & Anthony talk about the high-level items you need to focus on when building your taxation strategy for 2019/2020.

High-level items:

• Prepayments of rental and interest, up to 11 months

• Superannuation payments must be paid and cleared prior to June 30 to gain a tax deduction

• Superannuation contribution capped at under $25K for each member

• The carryforward rule allows for a top-up based on previous years

• Will you need to borrow?

• Ensure that while you have a great tax result, you don’t affect your ability to obtain a loan

• If you report on a cash basis, pay everything before June 30

• Watch that your invoicing is still following your normal monthly trend

• If you report on an accrual basis, ensure your invoices are dated June 30

• Keep your stock levels down

• Plant and equipment purchases for instant asset write off $150K (smart idea if cash flow permits or under finance)

• Don’t over commit your cash flow.

• Income protection and estate planning, utilising your superannuation fund

• Write off old or obsolete stock

• Review your fixed asset register with your accountant; this is a quick win

• Banks are now looking at your last two years accounts for loan approvals; make sure an aggressive tax plan does not affect your borrowing capacity

• Write off your bad debt

• Donations are a tax deduction; this is a positive win/win - giving back

• Cashflow and budgeting are critical - coming in a new blog

• Why is tax planning vital for a business that has suffered in the final quarter of 2019/2020?

• Cashflow is a major driver; if not available, look at deferments and the timing of expenditure.

Book a time to talk to Anthony.