It’s tax planning season!

It’s commonly thought that the busy “tax time” starts in July just after the end of the financial year.  However, the tax season starts well before that usually around April / May / June as the end of the financial year is approaching. It’s a time when any outstanding returns from the previous financial year are completed, lodged and paid.  But more importantly, it’s the time to implement strategies that may end up saving you on your tax bill for the current financial year.

What is the Tax Planning Process?

The tax planning process involves reviewing your current financial results and seeking to take advantage of some tax-saving opportunities.  Tax planning strategies often take time to implement and/or need to be put in place before the end of the financial year.

Top tax tips for this time of year.

Below are just a few tips to consider as a part of your tax planning preparation:

• Paying super contributions before year-end to ensure it is deductible in the current financial year;
• Write off bad debts before 30 June to be able to claim as a deduction;
• Review Division 7A loans and declare dividends for minimum yearly repayments;
• Review vehicle logbooks to ensure they are still valid and takedown closing vehicle kilometres at 30 June;
• For discretionary trusts, review eligible beneficiaries and put in place income distribution minutes/resolutions in accordance with the requirements of your trust deed;
• Pre-pay expenses that relate to a period of up to 12 months in the next financial year (for businesses with an aggregated turnover of <$10 million);
• Consider the timing of asset purchases to ensure it is deductible in the desired financial year. We note, the temporary full expensing measures (for businesses with an aggregated turnover of less than $50m) may mean that some entities wish to acquire assets before year-end, whereas others may wish to defer them to the subsequent financial year.

The COVID-19 Effect.

The Covid-19 pandemic has had a great impact on the financial circumstances of many businesses and individuals.  The timing and degree of the impact has also varied depending on what industry you are involved in.

These circumstances will also need to be considered to ensure the appropriate tax planning strategies are adopted.

For more information or to discuss how we assist you with EOFY tax planning to other ways we can support your business, please do not hesitate to contact our office.