In our last article we provided some ways to minimise your tax bill as an individual or business owner. Tax planning strategies is arranging your financial affairs to keep your tax bill in the lead up to 30 June 2019. Here are some other ways to keep your tax bill to a minimum.
Instant asset write-off
As a small business owner, you buy a new computer which you use 50:50 between work and your business. You may be eligible to write off 50% of the cost on tax. The Federal Government’s instant asset write-off scheme allows businesses with less than $10 million in turnover to write-off the business portion of a purchased asset. The entire cost of the asset must be less than $20,000 but can be new or second hand.
Write off unrecoverable debts
Before a debt can be claimed, it must be bad and not merely doubtful. You must also use the accrual accounting method, which means you show income when you have billed it, not when you collect the money. If you have documented evidence that it is unrecoverable, this ‘bad debt’ is eligible for a tax deduction. MAKE SURE you review unpaid debt in the lead up to 30 June.
Where possible, delay any income that you may receive and wait until after 30 June to raise invoices for work completed. In the lead up to the end of the financial year delay forecasted income such as:
- Interest on a term deposit (set the maturity date of the term deposit to after 30 June 2019).
The above is a simple strategy, less income – will lower your taxable income. Those with the available cashflow can enjoy the benefits of deferring any income to after 30 June 2019.