Have you done your homework? For those clients who've already had your 2018 tax planning meeting, or who are currently meeting your Maxim advisor, this is the time to refresh on those action plans. What do you need to do before 30 June, to lock in those tax savings?
If you want the tax deduction in 2018, you need to make the payment in 2018. For many super clearing houses, they set a deadline of 22 June 2018 to lodge your payment to ensure it clears by 30 June. Check with your super clearing house and act before the deadline.
Whether you’re self-employed or an employee, everyone under 65 (and those older who are working – check with your Maxim advisor) can claim tax deductions for top-up super contributions. Remember that everyone’s cap for deductible super is $25,000 p.a.. and there’s penalty taxes for exceeding this cap. Not sure how much cap you have left to use? Contact your Maxim advisor.
If you’re considering paying a bonus to your staff, document your decision by 30 June. Then you can claim the deduction in 2018 and still pay your staff in July.
Review your Accounts Receivable and identify any long outstanding or debts you consider not collectible. Write them off from your Receivables by 30 June and you’ll claim the deduction for Bad Debts in 2018.
If your business holds inventory, it’s good practice to do regular stocktakes. When it comes to cash flow, stock is one of the main culprits for tying up cash. Performing a stocktake for 30 June 2018 allows an accurate measure of your gross profit. Plus, if you write off damaged or obsolete stock, you’ll lock in the tax deduction this year.
For most businesses, when you issue an invoice is the year in which it’ll be taxed. Be careful though of the cash flow impact of delaying any invoicing until July.
The small business instant asset write off threshold of $20,000 will apply in 2018 and onto 2019, so there’s no rush here. But if you’re a small business and need new or a replacement piece of equipment, if it’s under $20K and you buy it before 30 June, that’ll be wholly deductibe in 2018, no stringing out the depreciation over the life of the equipment.
We’ve all seen the advertising encouraging you to spend money to save tax. Should you do it? Remember to only buy things if you need them, don’t spend money for the sake of saving tax: the maths doesn’t make sense.
Did you review your business structure with this year’s tax planning? Are there any actions to complete prior to 30 June?
Do you employ more than 20 staff? If so, are you and your payroll software ready for Single Touch Payroll to kick off 1 July 2018? Not quite a tax planning tip, but definitely something our employer clients should be well aware of and ready for. Not sure what’s involved? Contact your Maxim advisor.
Remember that a few of these have a lead time, so don’t leave it to the last minute. ACT NOW!
Please contact your Maxim Advisor if you wish to discuss any of the above points further, we are here to help.