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Business Tax Tips – 10 EOFY (End of Financial Year) tips to prepare for 30 June

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Business Tax Tips – 10 EOFY (End of Financial Year) tips to prepare for 30 June

10 EOFY (End of Financial Year) tips to prepare for 30 June

Time to plan for a good finish for EOFY and here are 10 tips to get started and prepare for 30 June.

1. Consider the ideal timing for asset sales

If you are thinking of selling a profitable asset this financial year, but are likely to earn a lower income in the next year 2015-16, it may be worth postponing the sale until after 30 June; however, if you expect an income windfall or higher salary from 1 July, it may be worth bringing the sale forward. As always, your decisions depend on your expectations for future asset prices, so don’t postpone a sale for tax purposes if you are expecting your investment to fall in value!

2. Get more from your salary or bonus

If you are expecting a pre-30 June bonus, you may be able to sacrifice your pre-tax salary or bonus into super rather than receive it as cash. As with the deductible contributions, this could reduce tax on your salary or bonus by up to 34%, and will allow you to take advantage of the contribution caps that apply in this financial year. Once your money is invested in super, tax on earnings is capped at 15%, which may compare favourably to investments held in your own name.

3. Pre-pay investment loan interest 

If you have (or are considering establishing) a geared investment portfolio, you can pre-pay 12 months’ interest on your investment loan and claim the cost as a tax deduction in the current financial year. This can assist to manage cashflow more efficiently, and potentially reduce your income tax liability this financial year.

4. Pre-pay income protection premiums 

If you are employed or self-employed, income protection insurance provides peace of mind about the security of your income in the event you are unable to work due to illness or injury. Premiums for this insurance are generally tax deductible; prepaying your annual premium prior to 30 June will allow you to claim a full year of cover in advance as a tax deduction.

5. Get a super top up from the Government

If you earn less than $49,4881 pa, of which at least 10% is from employment or a business, and make a personal after-tax super contribution, you could qualify for a Government co-contribution of up to $500. 

6. Boost your partner’s super and reduce your tax

If you have a spouse who earns less than $13,8001 pa, consider making an after-tax super contribution on their behalf, and you could receive a tax offset of up to $540. 

7. Use super to manage Capital Gains Tax

If you make a capital gain on the sale of an asset this financial year and earn less than 10% of your income from eligible employment, you may be able to claim a tax deduction for a contribution to superannuation, which could reduce or offset your capital gain. You will need to be eligible to contribute to superannuation (which means you are under the age of 65, or under 75 and meeting the work test), and be comfortable having your contribution preserved in super until you meet a condition of release (eg retirement).

8. Make tax deductible super contributions

If you earn less than 10% of your income from eligible employment (eg you are self-employed or not employed), you are generally able to claim a tax deduction for personal contributions to superannuation. As with super, you will need to be eligible to contribute to superannuation (which means you are under the age of 65, or under 75 and meeting the work test), and be comfortable having your contribution preserved in super until you meet a condition of release (eg retirement). If you claim a deduction for it, the contribution you make will be taxed at 15% in your super fund, so your tax saving will be the difference between your marginal rate and 15% – which could be up to 34%.

9. Review your portfolio

Review your portfolio and consider a strategic re-allocation of your investments. Consider portfolio allocations – is your portfolio heavily over- or underweight in specific industry sectors or stocks? Are you continuing to carry stocks that have exceeded your price targets or continue to under-perform – this may be an opportunity to re-balance. If you have an SMSF, now is the time to ensure your fund is invested in line with your documented investment strategy – your auditor will be confirming this after 1 July.

10. Offset capital gains with capital losses 

Generally, if you have incurred capital losses on your investments, you are able to offset these capital losses against any capital gains you have made. You can also use losses you have carried forward from previous years. Remember, income losses can only be offset against income; capital losses can only be offset against capital gains.

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

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Author: accountkeepingplus

Administration, bookkeeping and compliance for small business, Training, trouble-shooting, or we can do the books and payroll for you! Self Managed Superannuation Fund Service Provider, free support MYOB Certified Consultant, Reckon/QuickBooks Professional Partner.

6 thoughts on “Business Tax Tips – 10 EOFY (End of Financial Year) tips to prepare for 30 June

  1. Hello there !

    I’m your news letter reader, and I do appreciate your tips and emails, as there are always good tips and reminders.

    I would like to ask you a question if I may. I’m small business operator and I’m purchasing Protein Powder from the distributor, as we are too small to deal with big companies. When the goods purchased, there no GST on the invoices. I called ATO , it took me 30min to get GST specialist, he opened his register and told me that if I sell Protein powder, I need to charge GST. I was not impressed with his answer and told him about the supplier and no charge of GST on the invoice. I told him that I’m just re-package it in a small packaging, same product, he still told me that I must pay GST.

    Another concern was, when I bought Nesquik Flavoured drink, which no different from Protein Powder , which you mix with milk, I bought it from Wooloies, was for my big surprise without GST in the invoice.

    I would like to ask you expert advise, do I need to charge GST ? I’m registered for GST.

    I was trying to find suitable category, which I can’t under ATO list, as below.

    https://expertsystems.ato.gov.au/scripts/net/SearchableFoodList/scSearchableFoodList.aspx?PID=68&ms=Businesses

    preparations for drinking purposes that are marketed principally as tea, coffee or malted beverage preparations (not in ready-to-drink form) – GST-free – Schedule 2, item 7 of the GST Act applies.

    on the other hand protein shake mix – taxable – Not an ingredient for a beverage of a kind specified in Schedule 2 of the GST Act.

    protein shake, ready to drink – taxable – Not a beverage of a kind specified in Schedule 2 of the GST Act.

    I’m confused, as the other company sell it without GST and ATO says it should be with GST?!

    Help Please. Thank you in advance,

    Regards, Talina

    On Wed, Jun 3, 2015 at 10:04 AM, AccountKeepingPlus – Administration, Bookkeeping, Compliance News & Tips MYOB Reckon Quickbooks Training BAS

    Like

    • Hi Talina
      I have spent some time on this – no it is not clear whether GST applies!

      Generally for many items/services, if you ON-SELL, then GST would be charged – eg if you re-package, it is generally seem as “adding value” and since GST is a “value-added tax” as it used to be explained, GST would apply even if the item came to you GST FREE – unless it falls under exempt items such as fresh produce etc.

      However it is not clear here with your product – at all!

      Since you have documented your process of elimination – the best thing is keep a record of the above – the ATO will be considerate of interpretations and evidence of legitimate enquiries with it’s staff, and if your assumptions are reasonable, it will not penalise you if it can explain a mistake, and may even agree with you!

      ATO site says –
      You have the right to arrange your financial affairs to keep your tax to a minimum – this is often referred to as tax planning, or tax-effective investing. Tax planning is legitimate when you do it within the letter and the spirit of the law.
      https://www.ato.gov.au/General/Tax-planning/
      The GST food classification flow chart may help you? https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Food/GST-food-guide/?anchor=GSTfoodclassificationflowchart#GSTfoodclassificationflowchart

      Hope there is more info there
      Thanks for your query!
      Paul

      Like

  2. Reblogged this on and commented:
    Great tips for small business owners! #bookkeeping #taxtime

    Like

  3. Thanks for sharing this

    Like

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