Top 10 End of Financial Year Tax Tips – 2020

1. Write off bad debts

  • If all attempts to recover the funds have been abandoned – write it off!
  • An invoice needs to be written off by 30 June to be deductible.

2. Do a stocktake

  • Although some SBE concessions alleviate the need for a stocktake this may not be the best approach – you are
    missing out on deductions if your stock is overvalued.
  • How is your stock valued? Choose the most beneficial of cost, market or replacement value.

3. Defer income or bring forward expenditure

  • See if any planned income can be deferred until July.
  • If you have any required repairs or consumables etc to purchase – June is the time! SBE’s can deduct some
    expenses that are prepaid for the coming year.

4. Declare Directors fees or employee bonuses

  • Any expected director’s fees or employee bonuses may be deductible in 2020 if you have ‘definitely
    committed’ to payment of the amount within a reasonable period of time.
  • Bonus is deductible to business when accrued and assessed to the individual when received.

5. SBE accelerated depreciation

  • Assets under $30k can be deducted in full for SBE’s with a turnover up to $50 million, so the full tax benefit can
    be obtained in the purchase year (can apply to numerous assets in same year). This measure is due to expire
    on 30 June 2020 and will reduce to $1,000 limit again after that time.
  • From 12 March 2020 until 30 June 2020 the instant asset write-off has been increased to $150,000. There can
    be conditions associated with this, such as the motor Vehicle depreciation limit and private use appointment.
    Some rules on second-hand assets are also yet to be finalised.

6. If not using SBE depreciation – review assets on your register

  • Scrap any obsolete plant to deduct the balance of the written down value this year.

7. Consider any capital losses that can be recognised

  • If you have a capital gain for the year, a capital loss in the same year can be used to reduce it.
  • Ensure only genuine capital losses are redeemed – don’t sell the asset to get a loss and rebuy it.

8. Obtain a quantity surveyor reports for any rental properties

  • A Quantity Surveyor Report can increase your rental property deductions without any additional cash outlays.
    Deppro or BMT can organise these at a cost of around $600.

9. Comply with Div 7A Legislation

  • If your company has loaned funds to shareholders or related parties, requirements need to be met to avoid an
    unfranked divided being declared to the shareholders.
  • May need to have a Div 7a loan agreement, pay a franked dividend, or repay the funds.

10. Pay Super

  • Super is only deductible when RECEIVED BY THE SUPER FUND, not when it’s accrued and not on the day of
    payment. Pay your June quarter super before 30 June, rather than when it’s due in July – this moves the
    deduction to the 2020 year.
  • Consider any additional super contributions for yourself and pay any of this before 30 June.
  • In general, remember that if super is paid late it is no longer tax deductible at all.

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