Superannuation Tax Deduction
If you haven’t made your super contributions before today for the tax deduction this financial year, check with your fund if the contributions will be accepted today.
Stock take to be done to determine value of stock on hand as at 30 June. The ATO expects stock sheets to be prepared. Also consider method of valuation of the stock ( cost, market selling or replacement value) and the ability to write off any obsolete or slow stock. Remember, the lower your stock, the more likely it will reduce your tax.
Timing of Revenue Recognition
If your business revenue is assessable when invoiced, consider delaying invoicing until after 1 July 2014.
Bring Forward Expenditure
Consider bringing forward expenditure into June. i.e. if you are planning on doing some repairs to equipment, etc, get the repairs done in June rather than July. Stocking up on stationery and other consumables before June 30 can help offset profits. If you have any professional subscriptions or other everyday business expenses, paying for them today might be a good opportunity to obtain the tax benefit in this 2014 financial year.
If you have exhausted all avenues of collecting your debts and you are not going to get paid, then it is best to write these off as a bad debt on or before 30 June in order to reduce your income. Ensure that the appropriate GST related adjustments are made on the June BAS.
Review Asset Schedule
Review your asset and depreciation schedule to identify any assets that you no longer have or are now obsolete. This may result in a higher tax deduction for your business and save you tax. Print off your depreciation list, which can usually be found in your last tax return, and make a note of any assets that are obsolete or scrapped.
Employee Bonus Agreements and Salary Sacrifice Agreements
Review and set employee bonuses agreements and salary sacrifice agreements for the 2015 year. These need to be put in place before the bonus is earned to be considered a valid agreement.
It’s always a good idea to review your current business structure to determine whether this is still appropriate for your current situation. What may have been appropriate for you last year may not be the best in the future. Review on a yearly basis instead of leaving it until it’s too late.
Living Away from Home Allowances
Access to the transitional tax concessions for the Living Away From Home Allowance finishes today. From 1 July 2014, the Living Away from Home Allowance is
• Limited to employees who maintain a second home in Australia for their own use and provide their employer with a declaration about living away from home.
• Limited to a 12-month period for an employee at a particular work location other than ‘fly-in fly-out’ arrangements.
Year End Balancing Procedures
In completing your accounting records for the financial year, the following procedures should be carried out today:
a) Recording of all debtors and debtors reconciliation (print report);
b) Recording of all creditors and creditors reconciliation (print report);
c) Bank reconciliation, including loans, leases and hire purchase accounts (print reports);
d) Preparation of PAYG Payment Summaries and reconciliation of Gross Wages and PAYG Withholding amounts with Wages account; and
e) Reconciliation of your GST Collected and GST Paid accounts.
These procedures are extremely important, as some accounting programs will not allow these reports to be generated at a later date.
Delay income/Bring Forward income
If you are able to, try to defer income until after June 30 to avoid paying tax this financial year. As an example this may be done by reviewing term deposit maturity dates. Where your tax bracket is likely to rise due to “bracket creep” or due to the impact of the proposed Budget Repair Levy, it may be an opportunity for you to bring forward some income.
Gifts and Donations
Gifts or donations of at least $2 to tax deductible charities made by 30 June 2014 are deductible this year. You should ensure the charity is endorsed as a tax deductible gift recipient and that you keep receipts.
Home Office Expenses
Complete a 4 week diary to justify your claim for home office expenses.
Obtain a quantity surveyor’s report
For new or existing investment properties ensure you have a quantity surveyor’s report to justify depreciation on plant, fixtures and buildings.
Complete a schedule of work related travel during the year if you use the cents per km method to claim up to 5,000 business kilometres.
Log Book Currency
If you claim motor vehicle expenses using a logbook, make sure that you have a current log book for work related car travel, particularly if business use has substantially increased.
Prepay your professional fees, work related courses, (e.g. MBA fees), or annual professional body registration fees. If your bank can organise this, consider a 12 month prepayment on investment loans.
Inspect your investment property
Make sure your calendar records your inspection of your rental property and ensure you keep documentation of your travel expenses
Uniforms and work clothes
Consider upgrading your work wardrobe if your work clothes qualify for deduction (e.g. uniforms and protective clothing).
Private Health Insurance
Review your private health insurance arrangements to avoid the Medicare Levy Surcharge and maximise the Private Health Insurance Rebate for the 2015 financial year. The Rebate is means tested and the Medicare Levy Surcharge (MLS) is levied on payers of Australian tax who do not have private hospital cover for singles earning more than $90,000 and families on $180,000.