For most of you, the EOFY (end of the financial year) is happening in 9 days time …
So here are some tips before we cross the “magic” date of 31 March to possibly save some tax:
Employment Changes – click here to check out our blog article on the number of employment changes that are happening.
Stock – if you have stock you will need to conduct a stock-take on 31 March and this needs to be recorded. However the value that you use per item may reduce your tax. The values that you can use are the lower of cost price or market value, with market value needing to be substantiated by evidence if used. And just to clarify different valuation methods can be used for different stock items. Also any obsolete stock needs to be physically disposed of before 31 March. If you can reasonably estimate that your stock on hand is below $10,000 at 31 March, you do not need to do a stock take. However we recommend doing one anyway as best practice.
Bad Debts – in order to claim a bad debt, it needs to be physically written off and evidence that it is not being pursued by 31 March. So if you use an accounting system, the debt needs to be credited out of the system dated 31 March or prior.
Repairs & Maintenance – if you have any repairs that you are going to undertake in the next couple of months, see if you can get it done before 31 March and claim the expense in this financial year instead of waiting a whole year .. or at least purchase any materials required (eg paint). As long as the work has been committed to is enough to be able to claim the expenditure even if the work has taken place.
Vehicle Expenses – fill the business vehicles up with fuel before the end of year, maybe buy some more RUC and like repairs above, if there is anything that you can see is going to be needed in the next couple of months, do it before 31 March (example tyres).
Asset Purchases – consider the purchase of needed low cost assets (those less than $500 excl GST) prior to 31 March as they can be claimed as an expense. They are some quirks with this rule so please discuss with us if you are considering this.
Other Expenses – top up the stationery cupboard, order the printer cartridges, prepay any subscriptions as all these types of expenses are tax deductible.
Donations – pay any donations, particularly school donations, that you wish before 31 March and get a receipt in order to claim it as a rebate.
BUT don’t just go spending money to save tax .. as cash is always king!
Congratulations on making it to the end of the financial year and remember .. to check out our blog by clicking here for other tips and updates.
For some free tools to help you prepare for the new financial year click here