The end of financial year is fast approaching, and so is your chance to carry out essential EOFY reviews and action for your small business.
Here is a short guide to some key considerations to take before 30 June 2019:
1) Small business instant asset write off:
Let's start with the SBE accelerated depreciation rules, also known as the instant asset write off. Eligible businesses, that is SBE's with an annual turnover of less than $50 million, can claim outright deductions for assets purchased prior to 30 June 2019, however there have been some adjustments in the past few months so here is the schedule showing the max asset value and dates purchased/first used:
a) before 29 January 2019, if they cost less than $20,000 (ex Gst)
b) from 29 January 2019 and before 7:30pm 2 April 2019, if they cost less than $25,000 each
c) from 7:30pm 2019 on 2 April 2019 until 30 June 2020, if they cost less than $30,000 each
Please note that the new asset has to be installed and/or ready for use by 30 June 2019, so for example if you purchase a new business vehicle costing less than $30,000 before 30 June but you don't take delivery until after 30 June, you won't be able to claim the purchase this financial year.
2) Single Touch Payroll:
This has been a much talked about topic over the past 12-15 months, with larger organisations (20+ employees) already reporting via this system since 1 July 2018.
From 1 July 2019 all remaining employers (1-19 employees) will now also be required to report their payroll data electronically using STP compliant software at each pay run.
There are a number of cost effective software solutions out there now, if you are not sure which one suits your requirements, please contact us for assistance.
There are some extensions and exemptions for "closely held" employees, that is business owners and their relatives, who do not have to report their wages under STP until 1 July 2020.
If you are seeking clarification on this, please contact us, we'd be happy to explain in detail.
3) End of financial year tasks:
If your business has trading stock, now is the time to organize your EOFY stocktake, make sure to have enough man(women)power on hand to carry out this task.
Review any obsolete stock as to whether it should be liquidated or written off.
Review your accounts receivable (creditors) and accounts payable (debtors). Are there any customers who are unlikely to pay, if so, their balances can be moved to doubtful debts, or if they are not recoverable claim them as Bad Debts. Are there any customers for whom you can defer the invoices to 1 July so that the income does not have to be recognized this financial year.
Review your accounts payable to see if any prepayments can be made, eg insurances, stock purchases, interest etc
Get started on reconciling your accounting software, get it right up to date so you can make informed decisions about what potential tax strategies can be employed between now and 30 June.
Check that all your receipts are in order, you can only claim tax deductions for expenses that you have receipts for, so if you are missing any, start contacting suppliers for copies.
Make sure all superannuation guarantee payments are made prior to 30 June, as only actual amounts paid will be claimable in your business tax return.
For individual tax payers, evaluate if you want to make a concessional (deductible) super contribution prior to 30 June to reduce your taxable income. Keep in mind work test and max. contribution limits apply, these also depend on your current age.
Do you need to organize or update a depreciation schedule for your investment property, if yes, better get started and contact your preferred provider.
And don't forget, the best strategy starts with asking your advisor!
No Advice disclaimer:
Important: The information provided on this website, www.hendersonco.com.au and any subdirectories, information posts published on www.facebook.com/GHendersonCo and www.instagram.com/ghendersonco/ are not advice.
Clients should not act solely on the basis of the material contained on this website and the above social media pages. Items herein are general comments only and do not constitute or convey advice per se.
Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas.
This website and social media posts are published as a helpful guide to taxpayers and for their private information.