As the end of the 2015 financial year is approaching it is time to start getting things in order for the pre 30 June 2015 financial year. Some things to consider are:-
– Superannuation: Ensure that you have provided your employer with your SuperStream information. This will ensure that your superannuation is being paid into your preferred fund. If you have a self-managed super fund, you will need to provide your employer with your Fund’s ABN, bank account details and electronic services address (ESA). An ESA isn’t an email address, this is a common misconception. For more information, click here .
– Prepay your expenses: Most individuals claim deductions on a “cash basis”. If you are aware of upcoming expenses and are able to pay them before 30 June 2015, you will be able to claim a deduction for these expenses in your 2015 tax return.
– Deferring income: If you receive a salary, this may be out of your control. However, you may have the opportunity to defer income until after June 30 to avoid paying tax in the 2014/15 financial year, and deferring the tax obligation by up to 12 months.
– Repairs & Maintenance: If you own an investment property and there are repairs which are required you may consider organising and paying for some minor repairs before 30 June. Make sure you are aware of the expenditure that you can and can’t claim for your rental property.
– Private health insurance: Ensure that you have taken out Private Health Insurance or at the minimum hospital cover before June 30 to avoid the Medicare Levy Surcharge. Please be aware that if you take out private health on June 30 you are only exempt for one day of the current financial year. This is a strategy that will benefit you for the 2015/16 financial year not the 2014/15 financial year.
– Donations: If you are thinking of making a donation, consider making it prior to 30 June 2015. Also check whether the organisation you are donating to is a deductible gift recipient – If they are not, you will not be able to claim a deduction.
– Record Keeping: Ensure that you keep copies and records of all your receipts, the most common deductions missed are the ones that are forgotten. Keep a separate folder in your filing cabinet for the financial year and store all of you receipts in the one place.
– Capital gains tax: If you have made a capital gain in the current financial year, it is worthwhile reviewing your other existing investments for potential assets that may be disposed of at a loss, to offset against this gain.
– SuperStream compliant: For employers with over 20 employees, ensure that your business is ready for the implementation of SuperStream from 1 July 2015. By ensuring your SuperStream compliant this will create a smooth process when paying superannuation to your employees. For more information, click here.
– Deductions: Where possible you may want to bring forward deductible expenses such as repairs and maintenance. You could also consider prepaying monthly costs such as rent, electricity, wages and utilities. A reminder that small businesses (with a turnover of less than $2 million) can claim expenses prepaid for up to 12 months.
– Employee bonuses: As the end of the financial year is approaching quickly it is recommended that you formalise for employee bonuses (if appropriate). A reminder that the bonuses must be legally committed to prior to 30 June 2015 in order to obtain a tax in the 2015 financial year.
– Make sure your payroll records are up to date: Remember that employees are to be issued with PAYG payment summaries by 14 July 2015. Therefore it is good to have your entire payroll processed up to date for the timely issue of these documents.
– Bad Debts Review: Identifying and recognising outstanding debtors as unrecoverable prior to 30 June will result in a tax deduction being claimable for these amounts. However, you must have made a genuine attempt to collect the debt, which may include taking legal action.
– Fixed Asset Register Review: Review your fixed asset register for any assets that may have been discarded. Any amount not previously depreciated will be tax deductible.
– Immediate Asset Write-Off: As announced in the recent federal budget, small businesses are able to claim an immediate deduction for fixed assets costing up to $20,000. For more information, click here.
As we start a new financial year, it is also a great time to set your budgets and projections for the upcoming year. When preparing your budget, we recommend you consider the following factors: –
– Make sure the budget is in line with the goals of the business.
– Make realistic assumptions regarding your upcoming sales based on jobs already in the pipeline. This should include consultation with your sales team.
– Often prior year results are used as an indicative base for budget preparation. However, these results should be reviewed for special one-off items that are unlikely to reoccur. Similarly, if circumstances have changed (perhaps you have taken out a new lease on business premises), this should also be factored into your projections.
– Consider capacity for delivering the expected sales – Do you need additional employees and at what point do you want to bring them on board?
– Do you have sufficient cash flow for projected upcoming expenditure – For example, if a large piece of equipment needs replacing, how will this be financed?
For tips on tax planning, please click here or if you would like any more information on the above, please contact Grange Business Partners – we’re here to help!