By Robyn Graham, First Class Accounts Fraser Coast and First Class Tax Fraser Coast.
It is that time of year. Are you a little worried about tax time? Not sure you have all your ducks in a row?
From small business owners I speak to this time of year, that is what is on their mind.
As a specialist Tax Agent, and owner of First Class Accounts Fraser Coast and First Class Tax Fraser Coast, I know there is still time to invest in what’s important and direct your income in ways to improve your tax position.
Think creatively about superannuation.
You can take advantage of superannuation concessions. If you do not have employer support and you are under 65 years of age you can make a tax-deductible superannuation contribution for yourself up to the age base limit of $25,000 if you are under 50, and $50,000 for 50 and over.
Also, there is the bring forward system in place this year which means if you didn’t use your $25,000 contribution cap last FY you can bring it forward to the current year. Always remember that the cap also includes any SG Super you have received for the year. Remember too, you could also benefit from the Government’s co-contribution scheme.
The most important thing is that the contributions must reach your super fund before 30th June or they will go into the following FY.
If you are trading as a Company and wish to achieve a benefit for the Company, you could consider paying yourself (or directors) the amount you can allocate to your super as a wage salary sacrificed to super. You will then have to also pay the SG super on that amount and this will all be a deduction for the company.
Don’t forget the car mileage
You can use the kilometre rate if you only want to claim 5,000km per car you own. The 5,000km is per car per owner so if you rotate cars with your spouse and you both use your car for work purposes you can claim up to 10,000km each.
The 2020/21 kilometre rates are 72 cents per km as a flat rate not relevant to the size of the motor of the vehicle.
Payments in advance
Making payments in advance will move deductions from next year into this year, if you are an investor, wage earner or small business (turnover less than $2m). Investors and businesses paying interest in advance must make sure it is treated as such by the bank.
Instant Asset Write Off – Temporary Full Expensing
The Government has announced the extension of the full expensing to 30th June 2023.
Temporary Full Expensing allows an immediate deduction for purchases of new eligible depreciating assets (for businesses with an aggregated turnover under $5 billion), eligible second-hand assets (for businesses with aggregated turnover under $50 million), and the balance of a small business pool at the end of each income year in the period (for businesses with an aggregated turnover under $10 million).
If you have a capital gain, analyse your share portfolio or any other assets for a capital loss that you intend to realise soon. Make sure it is realised before June 30 as it can only be offset against your capital gain if it is realised in this year.
Delay selling your investment assets, if possible, until you have held them for more than 12 months in order to gain the 50% tax free discount on the capital gain.
Looking for ways get your books in order for tax time? Search our nationwide list of bookkeepers to find an expert near you.