Maximise your tax deductions for the 2018-19 financial year by planning and reviewing your records.
Here are top tips for businesses and individuals when it comes to year-end tax planning:
- Small business CGT concessions
Individuals operating a small business may be eligible for capital gains tax (CGT) concessions on the sale of business assets. The small business CGT concessions are available to business taxpayers with an aggregated turnover of less than $2 million or on business assets less than $6 million. Review your potential concessions for this financial year to receive the benefits of tax relief or contribute to your retirement savings through the sale of a business.
- Quarterly super contributions
The super guarantee (SG) requires employers to provide sufficient super support for their employees. For the quarter period of 1 April to 30 June, SG contributions are to be paid into an employee’s superfund by 28 July. However, only those payments made by 30 June 2019 and the quarterly due date will be eligible for a tax deduction in the 2018-19 year. You can make voluntary employer contributions of more than the required amount to increase benefits, but consideration must be given to concessional contributions caps and the impacts on other income assessed benefits and obligations, such as child care subsidy and HECS repayment thresholds.
The year-end stocktake should involve a review of all trading stock and a decision made about its value from both a tax and commercial perspective. Obsolete, slow-moving or damaged stock should be identified by 30 June and disposed of for income purposes in order to receive a deduction.
- Trust resolutions
Trustees of discretionary trusts must make and document resolutions before 30 June 2019 about how trust income will be distributed among the beneficiaries. If you have not already done so, setting up an interim financial statement can assist with distributing trust funds.
- Deductions for expenses
There are a number of expenses that can be claimed for deductions in your individual 2018-19 tax return. Self-education expenses, such as course fees, textbooks, and stationery can be tax deductible if they are work-related or you receive a taxable bonded scholarship. Business owners operating from home may also claim deductions for home office expenses, such as room utilities, motor vehicle costs and depreciation and occupancy expenses.
- Depositing contributions
Any contributions that have been recorded for your SMSF need to be deposited into the fund’s bank account by no later than 30 June. This is especially important where members have reported concessional or non-concessional contributions.
- Capital losses
Selling assets that perform poorly, such as shares, could enable you to bring forward a tax loss. This can be offset against any capital gains made throughout the financial year.