With June 30 looming, it’s again time to quote Kerry Packer’s infamous maxim: ‘If anybody in this country doesn’t minimise their tax, they want their heads read’.
And Mr Packer would advise you to move fast – the window is closing on opportunities to minimise your tax burden for this financial year.
In this EOFY special, we’ve summarised the ‘key ingredients’ to maximise your available deductions as an individual or business and get saving like a Packer.
We won’t bore you with technicalities, but if anything on the checklist below feel relevant, contact us and we’ll talk you through maximising your advantage.
MWM Advisory’s EOFY best practice checklist
For individuals:
- – Offsetting realised capital losses against realised capital gains to reduce your net capital gain.
- – Donations are tax deductible. Make sure you keep the receipts for donations to approved charities.
- – Consider the benefits of deferring your assessable income to the 2017 income year.
- – Weigh up the value of incurring up-and-coming liabilities before year’s end.
- – If you own a rental property, make sure you’re maximising claims for capital allowance and capital works deduction on the property.
- – Pay income protection insurance premiums before June 30.
- – In limited circumstances, an immediate deduction is available for non-business prepaid expenses.
- – The rules have changed for car expenses and deductions. Check with us.
- – Salary sacrifice rules have also changed in relation to fringe benefits tax and paying bonuses into super. Check with us for more detail.
- – Make sure your superannuation contributions are structured to your advantage. Check with us for details.
For business:
- – You may be able to reduce the amount of your remaining tax instalments for the 2015/16 year by varying PAYG tax instalments, providing you with a cash flow advantage while you wait for your refund.
- – Write off bad debt prior to June 30 to receive an adjustment on GST charged on the original invoice.
- – Unutilised excess franking credits in a company may be carried forward as a revenue loss. Check with us for details.
- – Make sure you consider any upcoming liabilities and the value of incurring them before year end.
- – Talk to us about special considerations for non-commercial losses. There are some ways to make the most of this. As usual, we’re here to answer any questions.
- – Make sure your PAYG payment summaries are provided to your employees by July 14, 2016 and lodged with the ATO by August 14, 2016.
- – An individual or personal services entity is subject to Personal Services Income (PSI) – limiting deductions available – unless you can show that a ‘results test’ is satisfied. Check with us for details.
- – Be careful – if you use assets owned by a company outside business you may breach Division 7A, giving rise to an unfranked dividend for tax purposes.
- – Unless you are a small business, only certain prepayments are required to be made by law and amounts of less than $1,000 are deductible as incurred.
- – If you or your ‘associates’ borrowed money, received a benefit, or had a debt forgiven from a private company during the year, the Division 7A rules may apply to you.
- – Small business entities can choose to access certain concessions. Talk to us about what you can access.
- – If you’re a small business, make sure you use the concessions available to reduce your capital gains tax.
- – Make sure you consider the timing of income in regards to work in progress, sales income and the date of entering into a contract for the sale of CGT assets.
- – Super contributions for the quarter must be made before 30 June to get the deduction available.
- – The concessional contributions cap for the 2016 income year is $30,000 for all individuals, unless you were 49 years of age or older on June 20, 2015.
- – For people 49 years old or older, your concessional contribution limit for the 2016 income year is $35,000.
- – The non-concessional contribution cap for 2015/16 income year is $180,000 p.a.
- – Make sure you conduct stocktake before year end to identify obsolete items.
If you’re looking for some advice this end of financial year or would like to invest in our tax planning service, please call 07 5596 9070 today.
