2020 End of Financial Year Tax Tips

on June 3, 2020 General with 0 comments

How would you like to legally increase your Tax Saving by $500 or $1,000 or $10,000 or more?

Effective tax planning is something all business owners should be considered year-round and by making it a priority could result in you paying less tax liability.

Now is the time to act and focus on your tax planning in order to minimise tax, reduce risk, and be prepared financially for the year ahead. With the end of tax year nearing, this is the time where we meet with you, having considered what your tax position with respect to taxation looks like leading to the end of the financial year.

7 tax planning tips for better tax outcomes for business owners:

1. Pay quarterly super

Super Guarantee (SG) contributions must be paid by 30 June 2020 to qualify for a tax deduction in the 2019-20 financial year.

2. Superannuation Guarantee Amnesty

Employers who have historic SG non-compliance can self-correct unpaid amounts without penalty under the SG Amnesty. Employers can claim deductions without incurring administration charges or penalties until 7 September 2020. Payments made after this date will not be tax-deductible.

3. Review capital expenditure

This financial year, the instant asset write-off allows eligible businesses to instantly deduct assets costing up to $150,000 on their upcoming tax return.

4. Small business CGT concessions

Individuals operating a small business may be eligible for capital gains tax (CGT) concessions on the sale of business assets. The small business CGT concessions are available to business taxpayers with an aggregated turnover of less than $2 million or on business assets less than $6 million.

5. Stocktake

Obsolete, slow-moving or damaged stock should be identified by 30 June and disposed of for income purposes in order to receive a deduction.

6. Defer income

Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June so that income from the payments won’t be taxed until the following financial year.

7. Work from home deductions

If you’ve been working from home due to the coronavirus, the ‘shortcut method’ is available to claim 80c per hour worked on running expenses. Don’t forget to include “COVID-hourly rate” to claim on your tax return.

Contact the ATO

The ATO is responsive to businesses that are struggling to keep on top of their tax obligations due to COVID-19. Businesses struggling to meet their tax obligations should contact the ATO to discuss deferring payments, make variations to PAYG quarterly tax instalments, or change their GST reporting cycle from quarterly to monthly to receive quicker access to GST refunds.

Early access to superannuation

Individuals impacted by COVID-19 may be eligible for early access of up to $10,000 of their super from mid-April. Those who wish to access up to $20,000 must apply twice; once before 1 July 2020, and once within approximately three months after 1 July 2020.

We are here to help you. Please contact us for an arrangement to review your Year-End Strategies and answer any questions you have about your 2020 tax.

Remember, if you spend a little bit of time with us to review your financial situation and discuss your tax planning options, you could end up saving yourself thousands of dollars.

Now is the time to do it – please contact our office TODAY to get started!!