2020 Tax Planning Tips

10 Jun

Top 6 tax planning tips pre 30 June 2020

 

  1. Contribute to Superannuation

Pay your June quarter superannuation guarantee before the end of the year. To claim a deduction, the payment needs to be received by the Superannuation Fund before 30 June. If you are using a Superannuation Clearing House such as the ATO’s SBCH, your payment must be accepted by 23 June 2020.

You can also top up your voluntary superannuation contributions. Remember, you can contribute up to $25,000 in deductible super contributions each year, but be careful not to exceed this amount.  The payment need to be received by the Superannuation Fund before 30 June, so contact us if you need assistance to calculate how much you have available to contribute.

 

  1. Take advantage of the $150,000 instant asset write-off

This enables you to immediately deduct the business assets you purchase (both new and used) from your assessable income, before 30 June 2020, up to a per asset value of $150,000.  This threshold is proposed to extend to 31 December 2020, however this legislation has not yet been passed.  Also note that the $150,000 instant asset write off does not apply to passenger vehicles.  Cars (except motor cycles or similar vehicles), designed to carry a load less than one tonne and fewer than nine passengers are subject to the car limit of $57,581 (for the 2019–20 financial year).

Also review your depreciation schedule for obsolete items and write them off completely.

 

  1. Pre pay your expenses

Pre pay some of your expenses for the coming financial year in this financial year.  This can be things like your rent, insurance, and subscriptions to any professional associations.  Up to 12 months of the coming year’s expenses can be deducted in the current tax year.

 

  1. Review your debtors

Review your debtors and write off any unrecoverable debts.  These debts will come off your income in the year in which you write them off, regardless of the year you invoiced them.

 

  1. Complete a stock take

Review your stock valuation and write off any stock that is damaged or obsolete.  Complete a stock take, and remember that stock can be valued at the lower of cost or net realisable value.

 

  1. Update your vehicle logbook/s

Updating your logbook ensures you are claiming the most accurate amounts for your motor vehicle expenses.