Consider these tax savings strategies to minimise your 2023 tax!
Instant Asset Write off for purchase of assets set to expire on 30/6/23 - this means that for every asset that you purchase between now and 30 June, a tax deduction can be claimed to reduce the profit in your business.
Catchup Contributions – If your individual member account balance is less than $500,000, you are able to contribute up to $27500 to superannuation as a tax deduction each year but also make use of ‘catchup contributions’ if you didn’t contribute up to the cap in the last 4 years.
To illustrate:
In the 2022/23 year and previous 4 years a total of $132500 is available to contribute to super. As only$60000 has be contributed in the last 5 years, there are catchup contributions available to be made and claimed of $52500 in the 2022/23 financial years.
Reducing dividends payable to you from your company by repaying loans for drawings by 30/6/23.
Doing astock take – where you are holding stock that hasn’t been sold & is now obsolete or expired, perform a stock take omitting these unsaleable items so that you can get a tax deduction for the expense of these items.
Motor Vehicle Expenses – where your vehicle has high business use, have you completed a logbook over 12 consecutive weeks to determine your business v private use? Have you kept records of your costs including Fuel, Registration, Insurance, Repairs, Purchase Cost & Date of vehicle for depreciation, loan statements to claim interest so we can maximise your claim?
Capital Gains – have you sold any assets this financial year that you may be able to offset with capital losses within your portfolio? Consider selling assets before 30 June to realise capital losses so they can be applied to capital gains.
Necessary spending – is there any spending that you have coming up that you can bring forward and do before 30 June. We aren’t fans of spending money to save tax but where you have a cost that the business is going to have regardless of timing, consider purchasing before the end of the financial year and bringing the tax deduction into the 22/23 financial year.
Employee bonuses – Is there anyone in your business that you would like to thank for their contribution to the success of your financial year? Consider rewarding them and securing them in your business by paying them a bonus or incentive and paying this before 30 June.
Are you making the most of the Marginal Tax Brackets for individuals in your family group?
Have you considered:
a) Thespread of taxable income across family members
b) Paying wages commensurate with the duties that family members are performing in your business
c) Whether your company has sufficient franking credits to pay dividends?
10. Losses within your group – is there an ability to on charge costs to profit making entities from entities with losses?
11. Personal Services Income – if your business generates income principally from your own labour, have you paid attention to passing the 80/20test and doing work in May/June for unrelated clients? Do you meet the results test in your business? Are you able to do some work for other customers between now and 30 June to pass the 80/20test?
12. Spouse Superannuation Contributions –if your spouse earns less than $37000, have you considered making superannuation contributions of up to $3000 on their behalf so you can claim the spouse contribution of up to $540 as a tax offset in your tax return?
13. Non-Commercial Losses – where you have aloss making business in a sole trader or partnership, have you ensured thatyour business has turnover of at least $20000 if it hasn’t met any of the otherNon-Commercial Loss tests to claim your losses against other income?
Talk to your accountant about theseand further strategies that are applicable to you and enjoy less tax to pay asa result!
