Ah! It's that EOFY (end-of-financial-year) time again, and you are wondering if you can minimize your business tax liability. Well, you can with a little planning and preparation ahead.
A recent survey of 507 businesses by a Commonwealth Bank in May revealed that most of the small to medium businesses did not practice strategies available to them to minimize their tax dollar.
It doesn't take a tax expert to save on tax dollars, only some simple rules and advanced planning. First of all, your company receipts are necessary to add to the savings, even the small expenditures. In fact, it is wise to keep a file on all expenditures of your agency, especially if you are not sure it will be tax deductible. Allow your tax agent to make that decision.
Another step is to purchase stationery and other expendables by June 30, especially ink cartridges and toner which can be quite expensive but add up to some substantial deductions.
Bad debt write-offs is a necessary evil to operating any business but can add to your savings. Take time to assess these accounts and determine if there will be future income. If not, write-offs reduce your revenue which is obviously good for you at tax time.
Another method to minimize tax liability is to delay income. Postponing the distribution of invoices until July 1 will not be considered income for the current tax year, therefore, less taxes owed. If the revenue is needed to operate your business, you might arrange for a commission to be paid.
To gain a tax deduction for your staff's superannuation guarantee payments, pay them in June (after the last pay period) instead of July when they are due. This way, your agency will receive the deduction this financial year, rather than waiting a full twelve months.
Incidentally, you might be tempted to handle your own tax assessment when EOFY comes around, but there is a possibility you might miss something or pay more taxes than you need to. By putting your trust in a certified tax agent you can feel confident that the tax agent will provide your agency with the best outcome for tax minimizing. The icing on the cake is being able to claim your appointment fee.
For more hints and tips in finances and marketing on operating a successful business, look for more blogs by PaidOnExchange.com.au.