Tax Tips, 8 ways to minimise your tax this year.


Last minute ways to minimise your tax

 

1.   
Write-off
bad debts
.  To be a bad debt, you
need to have brought the income to account as assessable income, and given up
all attempts to recover the debt.  It
needs to be written off your debtors’ ledger by 30 June.  If you don’t maintain a debtors’ ledger, a
director’s minute confirming the write-off is a good idea.  

 

2.   
Trading
Stock.
  Write off any stock that is
damaged or obsolete. Complete a stock take (if you are not using the simplified
trading stock rules) and remember that stock can be valued at the lower of
cost, replacement, or net realisable value. You can use different methods for
different stock items.

 

3.   
Review
your asset register and scrap any obsolete plant.
  Check to see if obsolete plant and equipment
is sitting on your depreciation schedule. 
Rather than depreciating a small amount each year, if the plant has
become obsolete, scrap it and write it off before 30 June.  Small Business Entities can choose to pool
their assets and claim one deduction for each pool. This means you only have to do one calculation for the pool rather than
for each asset. It also allows you to claim an immediate deduction for
depreciating assets that are bought for less than $1,000.

 

4.   
Repairs,
consumables (office stationery etc), trade gifts or donations
.  To
claim a deduction for the 2011/2012 financial year, consider paying for any
required repairs, replenishing consumable supplies, trade gifts or donations
before 30 June.

 

5.   
Pay June
quarter employee super contributions
if you want to claim a tax deduction
in the current year.  The next quarterly
superannuation guarantee payment is due on 28 July 2012.  Some employers choose to make the payment
early to bring forward the tax deduction instead of waiting another 12 months.

 

6.   
Superannuation.
Don’t forget yourself. Superannuation can be a great way to get tax relief and
still build your wealth position.  Your
personal or company sponsored contributions need to be made before June 30 to
ensure deductibility. 

 

7.   
Capital
gains and losses
. Neutralise the tax effect of any capital gains you have made
during the year by realising any capital losses that you have. These need to be
genuine transactions in order to be effective for tax purposes. It may be
possible to contribute assets with unrealised losses to superannuation in order
to do this.

 

8.      Management fees.  Where management fees are being charged
between related entities, make sure that the charges have been raised by June
30.  Where management charges are used, make sure they are
commercially reasonable and there is documentation to support this position.  If any transactions are being undertaken with
international related parties then the transfer pricing rules need to be
considered and the ATO’s expectations in relation to documentation will be much
greater.  This is an area that the ATO
are placing under greater scrutiny.

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