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Tax Planning

Prior to 30th June each year, it is good to make sure that you have done everything that you can do (legally) to reduce your taxable income and minimise any tax that may be payable.  Here are a few things that can be done to assist with this:

  1. Review your trade receivables – review your list of trade receivables and consider writing off any debts that are not recoverable prior to the 30th of June. This ensures you do not pay tax on the income which you will not be receiving. If you pay GST on an accruals basis, this will also allow you to claim a credit back for GST that you previously paid.
  2. Review your stock on hand – while performing a stock take at the end of the year to determine the value of stock on hand, also consider what stock you are holding is obsolete and not saleable. This stock can be written off.
  3. Prepayment of expenses – consider paying expenses prior to 30th June for any expenses that you are going to incur in the following year. This will allow you to get a tax deduction in the current financial year and therefore bringing forward the tax deduction.
  4. Superannuation contributions – pay any employee superannuation contributions such as super guarantee and salary sacrifice contributions prior to the 30th of June. Following the last pay run in June, paying employees superannuation prior to the 30th of June will allow a tax deduction in this current year.  If you hold off paying in July, no deduction is allowed in this current year. Please note that your superannuation clearing house may have a processing cut-off date that may need to be considered.
  5. Maximising superannuation contributions – For the 2023 financial year, an individual taxpayer is able to make deductible concessional contributions up to $27,500. It is possible to make further contributions if your total superannuation balance is less than $500,000.  Utilising superannuation contributions must be in the superannuation fund account prior to 30th June 2023 to get a tax deduction.  So, any contributions should be made by 25th June to ensure the fund receives the contribution on time.
  6. Review Plant & Equipment – a deduction can be claimed for depreciable assets that are no longer being used. Therefore review the depreciation schedule provided in the financial statements for 30th June 2022 and advise us of any equipment no longer being used.
  7. For Individuals claiming deductions against salary income, consider the following to maximise tax deductions:
  • Claiming superannuation to the maximum of $27,500 (refer to above).
  • Motor vehicle deductions – ensure that a log book has been maintained for 12 week period in the last 5 years. Or if claiming using the cents per km method, a diary is maintained to substantiate the claim.
  • Home Office – If claiming a deduction using the fixed rate of 67 cents per hour ensure you have a record of all the hours you work from home eg. calendar or diary. If using the actual cost method, ensure you keep all the invoices to substantiate the claim.
  • Receipts – ensure that all receipts for any deductions being made are kept on record. This includes donations made to registered charities etc