It’s good to have a tax plan before the end of financial year comes as this will help you make sound decisions and maximise business returns. By now you should be looking at your expected taxable income for the 2018-19 financial year and your expected taxable income for the coming financial year. Seeking the assistance of a business accounting service provider can be helpful.
Talk to your accountant if your expected taxable income this financial year is higher than your expected taxable income for 2019-20; consider using the instant asset write-off that allows you to immediately deduct assets you buy for your business that cost below the threshold. Note that thresholds have changed many times, so ask your accountant about it. You have until 30 June 2020 to do this.
You can also prepay some of your 2019-20 expenses like insurance, subscriptions or rent in the 2018-19 financial year. Up to 12 months of the next year’s expenses are allowed to be deducted in the current year. Ask your accountant if it’s appropriate to postpone some invoicing for the current year as well. Check your debtors and write off unrecoverable debts or deduct start-up expenses, if applicable. You can also top up your voluntary super contributions.
If, on the other hand, you expect to have a higher taxable income for financial year 2019-20, you can ask your accountant if you can bring forward any invoicing into the current year for scheduled work which will be carried out in the coming year. You can also pay expenses as due instead of paying for them in advance during the current tax year. You can choose to buy equipment and assets this year according to the needs of your business.
Take advantage of your accountant’s business accounting service and ask about accounting for GST on a cash basis instead of accruals to improve your cash flow. Using the small business restructure rollover can also be good if you want to change from a family partnership to a family trust. A small business entity can transfer an active asset of the business to another as part of a business restructure and there will be no change in ownership. State transfer tax may apply but not capital gains.
Determine if instant asset write-off or depreciation would be better for your business. In some cases, not using the instant asset write-off may be better so as not to lose some deductions and depreciation. Make sure the log books of your vehicle are updated and consider getting mileage tracking apps. You might need to get a new log book if usage has significantly changed or if you are using a log book for more than five years. If applicable, do a stocktake as at 30 June 2018 and check your accounting for the private use of business assets.
Business Accounting Service
As you look for different ways to grow and improve your business, seeking professional advice from a business accountant and consultant could prove to be an important and helpful decision.
You can click here to speak to business experts. We would love to help you formulate investment strategies and streamline your processes to take your business to the next level. Our goal is to help you grow your business, find ways to invest more and increase your productivity.
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