Year end tax planning

Written by: Evan Lowenstein
As the end of the financial year fast approaches, it makes good business sense to turn your attention to ways of minimising your tax legally.
There are no secrets or mysteries, so the main points are summarised here:
  • Defer your income

  • A common way to defer income is to render accounts after the end of the financial year.
    In certain cases, there may be a possibility to defer income from one year into the next. This situation might arise when grants or deposits are received for work or jobs not yet completed by the end of June, so it may be prudent to review your work in progress at year end.
  • Maximise deductions

  • a. Superannuation
    All clients who employ staff and are required to pay superannuation on behalf of their employees need to ensure that all the superannuation obligations are up to date.
    In addition, all taxpayers who wish to make superannuation contributions up the limits need to have made them before the 30 June 2019.
    Please don’t leave this to the last minute as the banking system can be unreliable and payments made on the 30 June 2019 will not show up till 1 or 2 July 2019 and therefore deny you the actual deduction.
    Remember that this year the 30 June is a Sunday.
    b. Other expenses
    As far as the accelerated depreciation Budget measure as explained on the previous page goes, the new limit is up to $30,000. Businesses seeking to take advantage of the new accelerated depreciation rules must have purchased the new equipment by the end of June 2019 or at least have the contracts in place by the end of June 2019 for the expense to be incurred in this tax year.
    In addition, if there are certain expenses that relate to the following tax year, then it may be possible for that payment to be made in the current year, such as for travel, materials and some pre-payments in certain conditions.