OMG June 30 is almost here!!
Get prepared, don’t wait.
We’ve released our 2021 Tax Planning Tips and you can find them here.
These tax tips don’t replace specific advice for your circumstance, but help you identify what might work for you. Call or email us now if you want specific advice because time is running out for us to do the number crunching and for you to make use of strategies that are right for you.
Our most often asked questions deserve special mention…
Super – If you pay super for employees make those payments early in June. You can only get a tax deduction if the super fund receives the money by 30 June. Law sets due dates for each quarter’s super contribution, but you can pay more often. If you run more pay runs in June then you could pay employee super after each pay run to maximise your deduction for the year.
Immediate Asset Write Off – there’s no upper limit to what you can claim outright, except for cars. If you purchase a car worth more than $59,136 before 30 June then the amount over that limit is not a tax deduction for you. You can’t claim the GST component on that excess either.
Structuring for Asset Protection & Tax Effectiveness – July 1 is a neat date to start off with a new structure. If you’re still operating as a sole trader or if you’re changing your business then it might be worth re-visiting your structure to ensure it’s still effective.
Company Loans – If possible repay loans to your company. Your company earns interest on loans it makes to you and this interest is taxable. You may also need to receive an unexpected and unwelcome dividend or bonus to repay all or part of the debt which will need to be included in your own tax return.
Companies with Losses – the new Loss carry back tax offset might be useful. Broadly if the company makes a loss in FY2020/21, this be able to be offset against FY2018/19 and/or FY2019/20 profit so that the company can benefit from a cash refund, a reduced tax liability or a reduction of a debt owing to the ATO. We’ll consider this when we do your 2021 year end work if it’s appropriate for you. Your company must be up to date in its lodgments to qualify.
Trustees – If you have a Trust then you need to make a Trust Distribution Resolution before 30 June to state how the Trust income will be distributed to beneficiaries and therefore how it’s taxed. For our clients, we base these on your tax plan if that’s available. If you don’t have a valid Trust Distribution Resolution before 30 June then you might not be happy with your tax result.
Please call us now if you want to do tax planning on (07) 5446 1226. Meanwhile, we wish you every success in the lead up to year end.