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Most tax planning opportunities disappear on 30 June. A review in May or early June gives you time to act, rather than discovering in October what could have been done.
Superannuation
- Contributions are only deductible in the year your super fund receives them, not the year you pay. Allow processing time before 30 June.
- Check that employee super has been paid in full for the year under the payday super rules.
- Business owners may be able to make personal concessional contributions, within the caps.
Trusts
If you trade through a discretionary trust, the trustee usually needs to decide how the year's income will be distributed and document that decision by 30 June. Late or missing resolutions can result in the trustee being taxed at the top rate.
Bad debts
Write off debts you genuinely cannot recover before 30 June, with a documented decision. If you account on an accrual basis, this can reduce your taxable income for the year.
Prepayments
Small businesses can generally claim a deduction for certain expenses prepaid before 30 June, if the service period is no longer than 12 months and ends before the end of the next income year. Examples include insurance, subscriptions and some interest.
Trading stock
Complete a stocktake at 30 June and decide how to value each item: cost, market selling value or replacement value. Obsolete stock may be valued lower.
Assets and write-offs
Review the assets you have bought during the year and any you plan to buy. Small businesses may be able to immediately deduct eligible assets under the instant asset write-off, subject to the threshold and conditions that apply for that year. Assets must generally be installed ready for use by 30 June.
Company and Division 7A
- Check whether any shareholders or their associates owe the company money. Loans must be repaid or put under a complying loan agreement to avoid being treated as dividends.
- Decide on director fees and bonuses before 30 June if they are to be deducted this year.
Records and reconciliation
- Reconcile your bank accounts and loan balances to 30 June
- Review your accounts payable and receivable
- Finalise Single Touch Payroll for the year by 14 July
Book a pre-30 June review through our company, trust and business tax service and we will run through this list with your numbers.
This article is general information only and does not consider your personal circumstances. Tax rules, rates and thresholds change, so speak with a registered tax agent before acting on it.