Small Business Tax Advice & Planning
For a small business, professional tax planning can be a fantastic way to legally minimise tax obligations and redirect those funds where they’re most needed.
As specialist business accountants in Mandurah, the WealthVisory team stays up-to-date with all tax-related news and legal changes that may affect the way your business is taxed. This also means we’re able to inform our clients about any developments that could reduce their overall tax paid or allow them to claim new deductions in the process.
Tax minimisation strategies for businesses include:
- Maximising superannuation contributions without exceeding the relevant caps
- Bringing forward deductible expenses
- Deferring taxable income, and
- Managing capital gains.
Tax planning starts well before the end of financial year – many of these secrets to minimising your business tax require planning in advance, to ensure the appropriate financial records are kept. So even if you aren’t ready to lodge a business tax return, it’s a great idea to get in touch with us and find out how we can help.
Our hardworking business accountants stay up to date with all the latest changes in tax laws, ensuring we’re the only destination you need for business tax advice in Mandurah.
The sooner you get in touch with us, the sooner we can start implementing tax saving strategies for your business. Contact WealthVisory today to connect with one of Mandurah’s best business accountants.
Tax Concessions For Small Businesses
Is your business a small business entity? If so, you may be in luck – small businesses can access a range of tax concessions from the ATO.
To qualify as a ‘Small Business Entity’ the business must have an aggregated turnover (your annual turnover plus the annual turnover of any business connected/affiliated with you) of less than $10 million and be operating a business for all or part of the financial year.
If your small business is a company, you may also be eligible for a lower company tax rate.
Eligibility requirements can change from year to year, so if you’ve previously been eligible for small business entity concessions or small company tax rates, you’ll need to evaluate whether you meet the criteria each year.
Not sure if your business counts as a small business entity? WealthVisory has the knowledge and experience to give small business tax advice in Mandurah. To find out more about your eligibility, give us a call or make an appointment through our website.
Business Tax Deductions
Small business entities are eligible for an instant deduction for asset purchases. If your business has a turnover under $10 million or $50 million, you may qualify for immediate deductions on business assets purchased up to a certain dollar value.
You’ll need to buy these assets and use them or have them ready for use before by the end of the financial year to claim the deductible.
Small businesses may also be eligible to use simplified depreciation rules when claiming an instant asset write-off.
Tools of Trade / FBT Exempt Item Purchases
The purchase of Tools of Trade and other FBT exempt items for business owners and employees can be an effective way to buy equipment with a tax benefit.
Items that can be packaged include handheld/portable tools of trade, computer software, notebook computers, personal electronic organisers, digital cameras, briefcases, protective clothing, and mobile phones.
If structured correctly, the employer will be entitled to a tax deduction for the reimbursement payment to the employee (for the equipment cost), claim any GST input credit, and the employee’s salary package will only be reduced by the GST-exclusive cost of the items purchased.
Pay Employee Superannuation In Time
To claim a tax deduction for the financial year, you need to ensure that your employee superannuation payments are received by the super fund or the Small Business Superannuation Clearing House (SBSCH) by 30 June.
You should avoid making last minute superannuation payments as processing delays may cause them to be received after year-end. If for any reasons you end up having to make last minute payments and you would like to claim them as deductions for the current year, contact us immediately and before you make any payments for possible resolutions.
More Tax Time Tips For Small Business
Push tax payable to future years by:
- Deferring further invoices and receiving cash/debtor payments until after 30 June
- 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
Get tax deductions this year by:
- Purchasing consumable items before 30 June (include marketing materials, consumables, stationery, printing, office and computer supplies)
- Making payments for repairs and maintenance (business, rental property, employment) before 30 June
- Making pre-payments (up to 12 months) on expenses (e.g. loan interest, rent, subscriptions) before 30 June and obtain a full tax deduction for the financial year if you’re an eligible small business.
Ensure you prepare paperwork and records in advance for:
- Motor Vehicle Logbook: For at least a 12 week period starting on or before June 30, including odometer reading and receipts/invoices (or use the cents per km method to claim up to 5,000 business kilometers based on a reasonable estimate)
- Investment Property Depreciation Report: If you own rental property, allowing you to claim the maximum amount of depreciation and building write off deductions on your rental property
- Year End Stocktake and/or Work In Progress Listing: If applicable, you need to prepare a detailed Stock Take and/or Work in Progress listing as at 30 June. Review your listing and write-off any obsolete or worthless stock items. Talk to us about your different options for valuing stock, and how they affect your tax payable.
- Write Off Bad Debts: Review your Trade Debtors listing and write-off all bad debts before 30 June. Prepare a management meeting document listing each bad debt, as evidence that these amounts were written off prior to year-end and enter these into your accounting system before 30 June.
Additional Tax Time Advice For Businesses
PRIVATE COMPANY (“DIV 7A”) LOANS
Business owners who have borrowed funds from their company in previous years must ensure that the appropriate principal and interest repayments are made by 30 June. Current year loans must be either paid back in full or have a loan agreement entered in before the due date of lodgement for the company return, or risk having it counted as an unfranked dividend in the return of the individual.
Ensure that the Trustee Resolutions are prepared and signed BEFORE 30 June for all Discretionary (“Family”) Trusts. Please see us for more information about preparing and completing trustee resolutions.
We recommend making an appointment with us well before 30 June for sufficient time to implement tax saving strategies. For more information, check out our tax minimisation guides below:
This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.
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