Now is the time to focus on Tax Planning and any Tax issues that affect you before 30 June.  Follow these handy tips.

Superannuation

1. Pay all super owing to employees before 30 June 2013 to get the tax deduction this year.

To claim a tax deduction in the 2013 financial year you must pay the Super contributions by 30 June 2013.  If you pay your June 2013 quarterly contributions in June rather than July, you can claim the tax deduction in the 2013 year.  Remember all compulsory contributions are due 28 days after the end of each quarter.

2. Consider paying additional super contributions for yourself.

3. Under limited circumstances if you are employed it is possible for your employer to pay additional super contributions to your SMSF in June over the concessional contribution cap of $25,000 which is then not allocated to a member account until July.  The Trust Deed must allow for this.  Take care.

4. The concessional contribution cap is $25,000 limit for everyone in 2013 and there are proposed changes for 2014.  Take care as contributions that exceed your limit attract penalty tax.

Bad Debts

5. Write off any bad debts before June 30 – go through your debtors list and get it collected, take action, or write it off!

Debts should be written off as bad when the debt has no chance of being recovered.  The debtor must be removed from your accounts receivable list to be eligible for a deduction.  If you account for GST on an accruals basis you can make a GST adjustment when the debt is written off and claim back the amount of GST previously paid on the invoice.  

Expenses

6. Do any spending you would need to do anyway, such as:

• Get the vehicles serviced
• Buy all the stationery you need
• Print any advertising materials you need
• Purchase company uniforms
• Maximise Medical Expenses

7. If you are a property investor or run a small business (turnover of less than $2million) you are eligible for a tax deduction if you prepay expenses such as interest, strata levies and insurance.

Income

8. Separate any receipts that represent deposits received on any work to be done or has been received but not yet earned – it’s not taxable this year.  

Identify any invoices that you have raised for sales that relate to next year so that the income and payment of tax is deferred until earned.

GST Adjustments

9. If you have receivables that are more than 12 months old you can claim the GST back on your BAS even though you have not written the debt off as bad.  If you have creditors that are more than 12 months old you must repay the GST previously claimed.

Depreciation

10. Review your depreciation schedule and write off any obsolete or scrapped plant and equipment and you will receive a deduction for the written down value.  

For small businesses (turnover of less than $2million) any capital acquisitions below $6,500 will be immediately deductible.  Any motor vehicles purchased within the financial year will attract an immediate depreciation deduction of $5,000.  Depreciation is also accelerated as the long life small business pool and the general small business pool can be consolidated as at 1 July 2012 and depreciated at a rate of 30%.

But, before you do anything – check that the structure you’re working under is the most appropriate to give you asset protection, as well as flexibility for the distribution of profits in the most tax effective manner.

For more information or if you have any further questions contact Terry Dewing or call 9526 1211.