Tax Saving Strategies prior to 1st July 2019

Minimising Tax for Small Business Entity (SBE) taxpayers (turnover under $10m)

1. Accelerating Asset expenditure

All SBE taxpayers can choose to write-off depreciable assets costing less than $30,000. Also, assets costing $30,000 or more are allocated to an SBE general pool and depreciated at 15% (which is half the full rate of 30%) in their first year.  Note that the asset must be installed and ready for use by 30 June 2019 to be deductible.

2. Prepayment strategies

SBE taxpayers making prepayments before 1 July 2018 can choose to claim a full deduction in the year of payment where they cover a period of no more than 12 months (ending before 1 July 2020).

The kinds of expenses that may be prepaid include:

• Rent on business premises or equipment.
• Lease payments on business items such as cars and office equipment.
• Interest – check with your financier to determine if it’s possible to prepay up to 12 months interest in advance.
• Business trips.
• Training courses that run on or after 1 July 2019.
• Business subscriptions.
• Cleaning.

3. Employee Superannuation – Pay before 30/06/2019

Employee Superannuation accrued for the 4th quarter of the 2018/2019 Tax year isn’t due until the 28th July 2019.  But Super is only deductible once paid, not accrued.  So by paying 4 weeks earlier you get the tax benefit 12 months earlier.

This is some of the information we will need you to bring to help us prepare your income tax return:

• Stocktake details as at 30 June, unless you think the stock hasn’t changed by more than $5000 since last year.
• Debtors listing (including a list of bad debts written off) as at 30 June. Note: In order to claim a deduction, the debt must be written off on in your accounting system on or before 30 June.
• Creditors listing as at 30 June.