Year End Tax Planning Guide

The end of the financial year is again fast approaching and as your accountant, we believe part of our client brief is to help you minimise your tax liability within the framework of the Australian taxation system.

The purpose of this newsletter is to highlight some year-end tax planning opportunities but you need to act quickly and we encourage you to schedule a meeting to assess your options. We note:

  • To maximise the current year benefits we recommend the preparation of a preliminary estimate of your taxable income for the year ending June 30 to identify the size of any tax ‘problem’
  • A review of your latest financials (if current figures are not available then last year’s figures will suffice) to determine the need for tax planning tactics like expense pre-payments or income deferral.

The following list of tax planning opportunities is not exhaustive and we urge you to contact us to discuss any strategy you are planning to implement before June 30.

Pre June 30 Tax Minimisation Strategies

To minimise your tax liability there are several general strategies to consider before June 30.

Other Tax Effective Strategies

In May the Government announced a reduction in the company tax rate (for companies with turnover of less that $2 million) from 30% to 28.5% from 1 July 2015. In addition, the tax on un-incorporated businesses will be reduced by 5% (to a maximum amount of $1,000). As such, it may be advantageous to either defer deriving income until after July 1, 2015 or bring expenses forward to the current year.

Accelerated Depreciation Write Off

The accelerated depreciation write-off for assets up to $20,000 acquired by small businesses was announced in the May 2015 budget. The write off threshold was previously $1,000 and the concession only applies to businesses with an aggregate annual turnover of less than $2 million.

On face value it sounds like a fantastic tax concession but there are a number of conditions you need to satisfy.

Other Year End Tax Reminders

In addition to the tax planning opportunities, there are a number of reporting requirements regarding motor vehicles and the building and construction industry.

Personal Tax Planning Opportunities

There are tax planning opportunities for individuals including the medical expense offset and for people with a negatively geared investment property, you can potentially vary your Pay As You Go Witholding.

Superannuation Tax Planning Opportunities

Before making any superannuation contributions please discuss this with our office. There are strict eligibility requirements. Most importantly, regardless of the type of contribution being made the Super Fund must receive the contributions before June 30. Transfers and deposits must clear before June 30.

Disclaimer: This newsletter contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.