JCorp Accountants

Date: 14th March 2017
10 Simple Yet Effective Tips To Save Tax

The tax season is in reckoning. Do you wish to save on tax? Well, who doesn't, right?

There are many simple strategies which you can implement to lower or postpone tax you’re going to pay in this financial year.  JCorp Accountants having gathered a wealth of knowledge as tax accountants Sydney over the years outlines some of the below mentioned sure shot ways to pay less tax this year.

1. Postpone Income - a simple tip which can save a lot of tax for you

Ø  At times, it is the things that you don’t do, which can save you a bundle. In case, your cash flow permits, think about holding back on your invoices till 1st of July. This will permit you to escape your tax liability of the current financial year by postponing tax payable on that particular income to the next financial year.

Ø  Bear in mind, your tax bracket for both the financial years – you should be completely certain that you would not be taxed at a higher rate on the postponed income. We can surely assist you with that.

2. Claim Prior to Spending a Cent

For certain type of expenses, which have been incurred, but not paid by 30th June, businesses can get an instantaneous deduction that includes:

Ø  Maintenance & repairs - You can claim for repairs that are undertaken and billed by 30th June, but they are not been paid until the next financial year.

Ø  Directors’ fees - You can claim a tax deduction for directors’ fees that are “definitely committed” at 30th June timeframe and have passed a fitting resolution to sanction the payment.

Ø  Staff bonuses - You can claim a tax deduction for bonuses and commissions of the staff that are unsettled and unpaid at 30th June wherein the business is “certainly committed” to the expense.

3. Bring Your Payments Forward

Ø  Consider 30th June as your cut-off date & try to bring your expenses forward which you will be incurring after that date - this may include subscriptions, donations, insurances, staff training, etc. One of the ways to do this is by requesting for those invoices earlier.

Ø  Buy consumables required for office work – it may include computer supplies, stationery, printing, etc. prior to 30th June. You can also consider lowering tax liability by making payments for maintenance and repairs of the property owned by your business or rental properties prior to this date.

4. Super Deals - Pay the June Quarter Superannuation  

You perhaps know that if superannuation is paid on time, it is deductible when it is paid – right! As you have to pay the 9.5% superannuation by 28th July, you can bring it forward by a month and pay it right now and claim the deduction. So, why wait a complete year to lower your tax?

5. Using All of Your Superannuation Cap

Ø  The federal government has made few changes to the superannuation; however, placing money into superannuation is one of the finest ways to reduce your income tax bill.

Ø  Suppose, maximising your superannuation is part of your retirement plan, then don’t miss to put in as much as you can into your super fund.

Ø  Also, ensure you don’t surpass the super contribution caps. We can assist you with regards to your maximum limit and how much you can contribute each year.


6. Junk Stock

Ø  The higher the value of your stock, the higher will be your profit and tax. Your business profit is directly affected because of the value of your closing stock.

Ø  Prior to 30th June, ensure performing a complete stock take. You can write off before June 30th and obtain a tax deduction this year for any out of date or obsolete stock that you find, which your business just can’t sell. At the start of the financial year, this will provide you with a tax deduction that will be equivalent to the value of the asset.

7. Write off Bad Debts

Ø  Even if you haven’t been paid on any invoices you’ve issued, your income tax is payable. So, avoid paying tax on any invoice for which you know you won’t ever get paid. Check the list of those who owe you money and write off those as bad debts in the current financial year.

Ø  Nonetheless, you need to demonstrate that you’ve made a real effort to recover the debt. Normally, the debt needs to be more than 12 months old. Make a document listing out each of the ‘bad debt’ as a proof that these amounts were, in fact, written off before the end of the financial year.

8. Capital Gains Tax (CGT)

Ø  It is often about timing when it comes to reducing your capital gains tax. Make sure that you have owned the asset for at least 12 months.

Ø  In case, you’re having a capital gain, find out if there are any investments that are making a loss, which you can sell.

Ø  Are you eligible for any capital gain rollover relief concessions or the small business CGT concessions? In fact, we can also assist you here. CGT is a whole subject on its own, and the probable savings are so huge, it is surely an area in which you should take our guidance.

9. Loans from Private Company

From your company, if you have borrowed funds, we strongly recommend that you get in touch with us. You should have an appropriate loan agreement in place. We’ll go through your position and make sure that the minimum principal amount and interest repayments are completed by 30th June. It is crucial that business owners are conscious of this requirement because the penalty for non-compliance can conclude in the whole loan amount being held as an unfranked dividend paid and taxed at marginal rates!

10. Crucial Considerations

In the perspective of your business’s cash flow, these strategies need to be evaluated.

Ø  Making a voluntary contribution to your super fund, purchasing assets or prepaying for expenses will enhance your tax position; however, it could have an unfavourable effect on your cash flow.

Ø  At this particular time of the year, many people get trapped and end up spending money solely to get a tax dedication.

Ø  Remember, fees paid for the purpose of tax planning to your tax accountant can be claimed as a tax deduction.

Ø  A small and modest investment in tax planning strategies can save your business thousands of dollars.

Final words

 

Our tax planning process could save you thousands of dollars depending on your state of affairs. So, the cash savings would reflect in your bank account instead of the Tax Offices’. Never leave your tax planning till the last minute like your Christmas shopping!

Always trust your hard-earned dollars with a reliable tax accounting services in Sydney as you need to ensure that your tax planning strategies deliver maximum tax savings! You can also get in touch with us for all your needs with respect to taxation advice & compliance or any other tax services in & around Liverpool in Sydney.

Email us at info@jcorpaccountants.com.au or Give us a Call on 1300 733 795 today for a free consultation, so that our team of finest tax accountants can help you with your tax planning without any delay.

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