The Last Minute Tax Rush
“Get your deduction before the end of the year!”
“EOFY Sale!”
“$20K can be yours before the end of the year!”
Lets cut through the jargon. In the 2015 federal Budget, the government announced its intention to increase the instant asset write-off threshold to $20,000 for assets acquired and installed ready for use from 7.30pm (AEST) 12 May 2015.
Look at your financial position critically. Chances are, if you didn’t have $20,000 to spend on your business before the recent federal Budget announcement, you won’t have it in the days leading up to 30th June. If you’re uncertain about what to do, talk to us!
If you expect big taxable profits next year, but little this year, why spend up big now. It is probably much better to defer this expenditure until the next year to even out the cash flows and taxes.
Consider also that you need to consider income too: bring forward the income or delay.
If you do need the deduction this year then consider:
The capital ‘$20k’ up front deduction – but only if you were considering buying it later anyway.
Paying super before the 30 June for the 4th quarter.
Prepaying expenses for next year.
Writing off bad debts – review your trade debtors listing and write off any uncollectable debts.
Donating – remembering that any contribution you make to a charity or a private ancillary fund above $2 is tax deductible.
As with any deduction, remember the golden rule: you can’t claim what you can’t prove.
This year the ATO is paying particular attention to personal technology claims – such as phones, computers and iPads – and travel costs. If you are claiming work-related expenses, make sure you have your receipts and can justify them as work costs.
