Every small business owner knows the stress that comes with the end of financial year.
A lot of valuable time and energy gets poured into getting your paperwork in order and making sure that you're minimising your tax bill as much as possible.
The good news is that there is still time to sort things out, and with this information you can feel confident that you are on top of your tax before the end of the financial year.
30th June is fast approaching.............
There are many planning issues and opportunities to explore and action before 30th June 2015.
Some of the basic things that MUST be undertaken before 30th June 2015 include:
Review Trust Deeds and Deed Amendments;
Understand net taxable positions and discuss how Trust income will be effectively distributed;
Document trustee resolutions before 30th June 2015;
Calculate Division 7A loan repayments including interest costs and discuss repayment strategies for implementation;
The 2015/16 Budget was handed down in May and below are the changes that we think will most affect you pre 30th June 2015:
Changes Effective from 12th May 2015
Expanding accelerated depreciation for small businesses:
Small businesses with an aggregate annual turnover of less than $2 million may be able to immediately deduct the cost of assets, provided the asset cost is less than $20,000
It will apply to assets acquired and installed ready for use between 7.30pm 12 May 2015 and 30 June 2017
Assets valued at $20,000 or more will continue to be placed in the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).
From 1 July 2017, the thresholds for the immediate depreciation of assets and the value of the pool will revert to existing arrangements.
Some other general considerations for you to consider:
Get on top of your records
If you've been organised this year then you deserve to give yourself a big pat on the back! If, however, you've fallen behind on your record keeping responsibilities, we advise you to get as much as you can together and get it to your accountant ASAP.
Write off bad debts
Unfortunately, there will be times that a client does not pay you for work that has been completed. This is known as having a bad debt and it is an extremely frustrating situation for any business owner.
A small consolation can be found in the fact that bad debts are tax deductible. In the event that you have a bad debt, it should be formally written off in your financial records. You will then be able to claim it as a deduction against your taxable income. It may also be necessary for you to provide the ATO with proof that you have taken reasonable steps to recover the amount.
Get the ball rolling on stocktake
Retailers and wholesalers are required to undertake a stocktake at the end of each financial year.
However, if your annual turnover is less than $2 million and the difference in value between your opening and closing stock can reasonably be estimated to be less than $5000 then may be exempt from this requirement.
Of course there are many other areas for possible planning, too many to mention here, but please do not hesitate to contact our office on 9387 5637 for more information and assistance.
Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.