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  • Prepay expenses Prepaying certain expenses before year end can reduce your current year tax liability. If payments are due early next financial year, a pre-payment may entitle you to the tax benefit much earlier. The rules differ depending on whether the taxpayer is an individual, small business entity (SBE) or other business entity. Broadly, an SBE is a business entity that has turnover of less than $2 million. For other businesses, prepayment of consumables and other recurrent expenses will reduce your income; however, prepayment for stock will not reduce your income as this is not deductible until sold.
  • Business start up costs Commencing from the 2015/16 financial year, new businesses can deduct their formation expenses (ASIC fees, company formation costs, legal and accounting fees) as a 100% deduction in the first year. These costs were previously written off over 5 years.
  • Paying employee superannuation If an employer wishes to receive a tax deduction in the current year for employee superannuation contribution, the cash will need to be paid to the fund by 30 June. Make sure you allow yourself sufficient time for contributions to be processed. However, make sure that the employee is aware of the timing of the payment so as not to adversely impact their concessional contribution cap. All businesses (small business from 1 July 2016) should now be paying and reporting superannuation using a SuperStream compliant system.

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