AUTHOR

Terry Rodoni
Terry Rodoni
Senior Consultant

 

The end of the financial year is almost here again. Tax minimisation strategies are a year round focus, however 30 June is a critical deadline for businesses to ensure they have planned correctly to minimise tax. Here are some key opportunities to make sure you don’t miss out:runner.jpg

  1. Bad Debts - These will need to be written off prior to 30 June to be eligible for a deduction.  Make sure you go through your debtors (people who owe you money) list and write off anything that is not collectible.
  2. Stocktake – Most chiropractors do not carry large amounts of trading stock (items for resale). If you meet the ATO small business entity criteria (which most chiropractors will), and the difference between your stock on hand as at 1 July 2015 and your reasonable estimate of stock on hand as at 30 June 2016 is no more than $5,000, then you are not required to complete a stocktake.
  3. Bring forward expenses - Undertake some forward planning and look at expenditure for the next few months.  There may be some expenses that you are going to incur but could be better brought forward to minimise your current year tax.  Consider items like training, repairs and maintenance or prepaying some interest.
  4. Small business entity depreciation concessions – For qualifying small business, you can obtain an immediate deduction for individual asset purchases under $20,000 (including installation costs and excluding GST).
  5. Shareholder loans – If you operate in a company, you need to make sure that any loans from your company to you are set up properly or repaid by the end of the financial year.  Otherwise you could end up with a deemed dividend and some unexpected tax.
  6. Trust distributions – If you operate a trust you need to make sure that the trustee decides the profit distribution prior to 30 June.  This decision should be recorded in a minute and signed before year end.  This is an ongoing area of Australian Taxation Office compliance.
  7. New small business set up costs immediately deductible - Certain new business set up costs are immediately deductible (normally claimed over a 5 year period). If you are considering setting up a business, your set up costs incurred could be immediately deductible for the 2016 financial year.
  8. Small business income tax offset - A tax offset is available on the tax payable by an individual on the portion of their income received from:
  • net small business income from sole trading activities
  • share of net small business income from a partnership or trust.

This can result in reducing tax payable for small business income by 5% (up to $1,000 each year).

SUPERANNUATION

  1. Superannuation - The minimum super you must pay is 9.5% of each eligible employee's 'ordinary time earnings'. To claim a contribution for the June quarter superannuation, you will need to pay the contribution at least one week (to allow the superannuation fund to the contribution) before 30 June to claim it in the 2016 year.
  2. Personal Super - As with employee super, you also need to pay your personal super contributions prior to 30 June to get a deduction this year. Just remember there is limit of $30,000, however for individuals who are 49 years old or over on 30 June 2015 the limit is $35,000.
  3. Minimum Pension Payments – Ensure that if your super fund is in pension phase that you have withdrawn the minimum pension amounts so you retain the tax free status of the fund.
  4. Co-Contributions - If your personal adjusted taxable income, which includes reportable fringe benefits, reportable superannuation contributions and investment losses, is less than $35,454, and 10% or more of your income from eligible employment-related activities, you may be eligible for the full co-contribution at the rate of $0.50 for every dollar you contribute, up to a maximum of $500 per year.  The co-contribution phases out once your taxable income is over $50,454. If you contribute a lump sum of $1,000 the maximum co-contribution from the government will be $500.

This page has been prepared by RSM Financial Services Australia Pty Ltd ABN 22 009 176 354, AFS Licence No. 238282.

As everyone's circumstances are different and this article doesn't take into account your personal situation, it is important that you consider the above in light of your financial situation, needs and objectives, and seek financial advice before implementing a strategy.    
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