Hiring a tax return accountant is definitely a way to reduce your bounding thoughts about tax payments but, a few suggestions are always invited!
Here are a few tips that can help you and your tax accountant pay lesser tax this year and save a little money on the same.
Tips to Follow
Defer your Income
This simple tip can save a real bundle. For this, one need to make sure that you need to hold your invoices until July 1st but, only if your cash flow allows you to do so. Make sure this doesn’t affect your tax bracket for the coming year and create a burdensome tax liability over your pocket.
Claim before spending a cent!
Businesses can get an immediate deduction for the certain expenses that they have “incurred” but, haven’t paid by 30 June. These may include categories like:-
- Staff bonuses — claiming a tax deduction for staff bonuses and their commissions that is basically company owed but remains unpaid till 30 can be included herein.
- Directors’ fees — claiming a tax deduction for the directors’ fees at 30 June can be an inclusion here.
- Repairs and maintenance — claiming repairs that are billed by 30 June but not paid till the next financial year can be included.
Bringing forward payments
Considering bringing forward the payments for any expenditure that will be incurred after 30 June through getting the invoice before 30 June can be another great idea. These may include things like-staff training, purchasing consumables, insurances, subscriptions, donations, etc.
Paying the June quarter superannuation
Superannuation paid in time remains deductible when paid. As 9.5% superannuation has to be paid by 28 July, bringing it forward a month and paying it now and claiming the deduction can definitely save.
Use all the superannuation caps
As per the changes made by the federal government, putting your money into superannuation becomes one of the best routes to minimize the income tax bill. Any of the accounting firms Melbourne can guide you on this.
Writing-off the Bad Debts
The income tax is only payable on the invoices issued, even if they aren’t paid. Paying tax on any invoice that one thinks will never be paid is not a good idea. It’s better to identify these and write off these ‘bad debts’ before filing your tax.
Private company loans
Get any of your borrowed funds and their associated loan agreement, minimum principal and interest repayments that will be availed by 30 June before filing your tax. This could be a great factor in minimizing your pay.
These points of advice can be of great help to reduce the tax burden but, one needs to modify these strategies as per the nature and business cash flow. A little tax planning in association with your professional tax accountant can save you a lot.
So, what keeps you waiting?