June 30, is fast approaching! We’ve nearly made it over the line and finished this tax year!
Every small business owner knows the stress at tax time and how important it is to get your personal and business affairs in order before the end of the month.
Here is a quick checklist to consider before July 1 rolls around:
New superannuation rules came in force on July 1, 2017. Be sure to check with your accountant how this may affect you. One major change is the annual concessional contributions for 2018 is capped at $25,000.
If self employed, be sure to check on your super contribution. From 1 July 2017, most people will be able to claim a full deduction for contributions they make to their super until they turn 75 years old.
Also, make sure your super fund has your tax file number (TFN). If it doesn't your super contributions will be taxed an additional 34%!
In July 2017, the Fair Work Commission increased the minimum wage by 3.3%, bringing the minimum hourly rate to $18.29 per hour. Have you been paying your employees the correct wage?
If your a Sole Trader or Partnership, be sure to transfer your income, so your account is ready for 2018. All business owners should ensure their wages have been paid correctly.
Asset Write Off
The $20,000 asset write off is still here! If your businesses purchases an asset <$20,000 you can immediately deduct the business portion in your tax return. This will be decreasing to $1,000 from July 1, 2018.
Get in your Deductions
EOFY tends to be a time for small businesses to go on a spending spree. You will see big EOFY sales trying to target business owners looking for that tax deduction. Whether your business needs a new printer, new computer or new equipment, buy before July 1, and use it towards your tax deductions. But makes sure you calculate its value to your business!
Collect those unpaid debts or write them off! Bad debts must officially be written off before June 30, 2018. This can be difficult for a cash based business, that only counts income once received. But it is something worth investigating.
Paying off your hects debt? The 2017/2018 HECS threshold is $55,874, which the government plans to lower to $42,000 in 2018. Which means if you’re a business owner with a HECS debt this could mean a big increase in your tax return in 2018/2019. So be sure to plan ahead for the year.
See your Accountant
It is important to speak with your account and get some EOFY tax planning. It is no good after Jul 1, 2018 to start thinking about your tax planning. Anything you need to do (such as super contributions, purchasing of assets) needs to be done this month.
Always seek professional advice from registered accountant or financial planner!