Plan for Your End of Year Now!

March 28, 2018 October 22nd, 2021

Now is the ‘Prime Time’ to be talking to your accountant. It’s the ideal opportunity for your accountant to really make a difference for you and your business before the end of the financial year.

It is now that vital planning can be carried out in relation to your tax position. Together with your accountant, you can make valuable decisions that could save you thousands.

Get on the Front Foot

There is so much your accountant can do before the financial year is over including…

  • Preparing updated financial information.
  • Looking at projected income and expenses running up to the end of the tax year.
  • Meeting to work out how to optimise your tax position within legal limits.

Tax may not be the most exciting topic, but you need to be on the front foot with it and recognise it for what it is – a great opportunity for your business to save money!

Smart Proactive Tax Planning for Your Business

Now is the busiest time of year at MBC for good reason. It’s when the smartest businesses are contacting us to get prepared for the end of the year.

It’s also the time of year that we enjoy the most because we can make a real difference to businesses. And our clients end up loving us for it!

As accountants and business owners, we always need to be looking into the future, planning, projecting and making decisions based on past results.

Most people will have the information required to commence a review and tax plan when they finalise their March 2018 Business Activity Statement (BAS).

We can assist by calculating a forecasted tax estimate for you and your business and then discuss and suggest strategies tailored to your circumstances.

Our Top 5 Tax Planning Strategies to Consider

Some common tax planning opportunities may be created using the following strategies:

  1. Deductible super contributions – Superannuation if paid on time is deductible when paid. Since you have to pay the 9.5% superannuation by 28 July, bring it forward a month and pay it now and claim the deduction now. Why wait a whole year to reduce your tax?
  2. Personal super contributions – If maximising your superannuation is part of your retirement plan, then don’t forget to contribute as much as you are permitted into your super fund. We can guide you as to how much you can contribute. It’s a missed opportunity not to do this each year.
  3. Review your assets – Instant asset write off less than $20,000. Write off any obsolete asset and claim its remaining book value now. There are also new ways assets can be depreciated, called pooling, that will increase the depreciation expense. This isn’t suitable for all business, but it is worthwhile reviewing.
  4. Review bad debts – Your income tax is payable on any invoices you’ve issued, even if you haven’t been paid. Don’t pay tax on any invoice you know won’t ever get paid. Review the list of those who owe you money and write off those bad debts now.
  5. Trading stock valuations – The value of your closing stock directly affects your business profit, the higher your stock value – the higher your profit and tax. Review and identify any obsolete or old stock and scrap it or re-value it to its correct value. Individual items of stock can be valued at cost, market value, or replacement value.

Don’t Reduce Your Tax Planning Options for 2018

The benefits created from tax planning at this time of the year can be enormous.  Waiting until after the end of the financial year to calculate your tax liability will significantly reduce your planning options.

Depending on your situation, proactive tax planning could save you many thousands of dollars. That’s cash in your bank account, rather than the Tax Office’s!

Be Aware of Tax Changes for Small Business

Changes to the small business eligibility from $2 million to $10 million have created opportunities to access a range of tax concessions including…

  • 27.5% company tax rate.
  • 12 month prepayment rule.
  • Accelerated depreciation.
  • Instant asset write off less than $20,000.
  • GST small business concessions.
  • Simplified trading stock rules.
  • Tax concessions when restructuring a business.

To start your business review and tax plan, call our office today on 02 6362 0988.