EOFY tax planning: 13 things to consider before 30 June

As 30 June is just around the corner, here’s a quick reminder of things to think about in your year end tax planning:

1. If you are making personal super contributions, ensure they are received by the fund by 30 June. The maximum tax deductible contribution you can make has been reduced to $25,000.

The Non-Concessional Contribution limits have been reduced to $100,000, with the ability for those under 65 to use “bring forward” rules and make a lump sum contribution of up to $300,000.

Note: It is essential you speak to your accountant first to confirm you have not triggered the “bring forward” rules previously.

If you’ve had a good 2018, but are expecting a slowdown in 2019, consider double super contributions. Ask your accountant about reserves in super.

2. If you are receiving pension payments from your superannuation fund, ensure minimum annual pension payments have been drawn prior to 30 June.
3. If you are a small business and looking to buy plant and equipment soon, consider bringing forward the purchase to take advantage of the $20,000 “instant asset write-off.”

Note: This includes second hand assets. You also need to be running an actual business.

4. If you have realised capital gains during the year, review your investment portfolio for shares with unrealised capital losses and discuss with your accountant and investment advisor whether to sell and realise those capital losses. Only consider this if it fits your investment plan.
5. Further to Point 1 above, if you don’t have the cash to make super contributions, see if you can make “in specie” contributions to super such as transferring listed company shares. If you transfer loss-making shares, you get the double benefit of reducing capital gains and making a super contribution.
6. Pay staff superannuation before 30 June. If you don’t, it’s not deductible until the following year.
7. Consider paying any bonuses before year end or declare them. Speak to your accountant first regarding the rules on this.
8. If you have a discretionary trust, ensure your distribution resolutions are prepared and signed before 30 June. Allworths is currently working on this for affected clients.
9. Write off bad debts.

Note: Accounting provisions for bad debts are not deductible.

10. Conduct a stocktake and write off obsolete and damaged stock. Many business owners who carry inventory are unaware that stock isn’t actually deductible until sold or written off.
11. If your business operates on a cash basis, pay your suppliers before 30 June if you can. A good opportunity to get your accounting fees up to date!
12. Consider prepaying expenses and, again, talk to your accountant regarding the rules around this.
13. Ensure minimum loan repayments for “Division 7A” loans are made by 30 June.

As always, feel free to contact us with any questions or concerns relating to any of the above.

All the best with your year end tax planning!