With 30^th June fast approaching, here is a list of common tax planning strategies that we have been discussing with clients:-

• Prepaid revenue can be deferred to the extent that it relates to next financial year and where a customer has the contractual right to cancel the contract at any time.
• Buying items such as stationery, printer cartridges, stamps, etc by Thursday 30^th Those of you who entered the Simplified Tax System (STS) by 30^th June 2005 (who are therefore automatically assessed on a cash basis) may wish to pay any bills not due until July like your phone bill, rent, printing and stationery, etc.   Paying your accounting fees is also recommended!
• STS taxpayers are now known as Small Business Taxpayers (SBTs).  SBTs now include taxpayers with an annual turnover under $50,000,000.
• As we have previously highlighted, SBTs can claim a full deduction of any assets acquired. But they must be in your possession ready to use.  And if this means installation, then it must be installed before July.
• For more on the instant asset write-off, refer to recent blogs titled Parts 1, 2 and 3.
• SBT taxpayers can also claim a full deduction for payments such as insurances, rent and the like which cost more than $1,000 even though the service period runs past 30^thJune and into the next financial year.
• For those of you who receive this e-mail that are employees or rental property owners, you can claim a complete write off for assets costing less than $300.
• If a property is jointly owned, then you can claim the full cost of assets costing less than $600 (meaning you claim less than the $300 limit each).
• Investors can claim prepayments in full.  An investor with a property or share loan can claim a deduction for 12 months prepaid interest.  Please note that the ATO requires that for the prepayment to be claimed, one must benefit through a lower interest rate (for which you need to keep proof).
• For those who have already generated a large capital gain, consideration should be given to selling other investments that have an unrealised capital loss.  Those with no or minimal employer SGC support could consider making a deductible contribution into superannuation to offset the tax on the capital gain (but speak to a financial planner first).
• If you are about to sell an asset which will generate a capital gain, consideration should be given to selling it after 30^th This will defer the payment of any capital gains tax liability until as late as early June 2024.
• Companies can accrue a director’s fee which is not payable until the following financial year.  Why? – the company gets a deduction in this financial year but the director is not assessed on the income until the following financial year in which it is received.  The trick is to document it correctly.
• If you have stock, count it (a separate e-mail will be sent to business clients with stock).  As stock can legally be valued differently from item to item and from year to year, it can result in some advantageous outcomes.
• Donations are deductible.  It must be a genuine donation so you can’t receive anything in return.  Raffle tickets can’t be claimed.
• Our tax planning checklist also considers other items such as writing off bad debts, making Division 7A loan repayments, whether a company can reclaim past tax payments under the loss carry back rules, distributing to a new beneficiary and varying PAYG Instalments. How these and other opportunities are employed depends on your circumstances. We identify what you can do by running through our 67 point checklist.

All of the above tax planning tips are explained to our clients in any easy to read Tax Planning Report.  And to give you more control over your cash flow, that report also sets out your income tax payments for the next 12 months.

We welcome any query about these tax planning tips.

We end this blog by taking the opportunity to remind you of:-

• The need for those who were directors before November 2021 to apply for their Directors Identification Number by early October at the absolute latest.
• Single Touch Payroll reporting fields will greatly expand under what is called STP2 and there is much preparatory work to be undertaken.  And with STP2 now to be shared with Fair Work Australia, you don’t want to be getting it wrong!  We encourage you to adopt the new system as soon as possible as any extension only causes more work later.  Please let us know if you would like a referral to a payroll expert.