Business Basics, Strategy, Tax & Accounting

2016 Tax Planning Tips

We know it’s not the most exciting of topics but these are tips that help you save some tax and that’s certainly worth considering if you’ve had a profitable year.

We’ve included links to each of the video’s and a short summary below

Tip # 1

If you have some spare cash pre-pay some expenses. Things like Rent, Interest and Insurance are great to prepay. You can also get the GST benefit earlier as you have parted with the cash in the June Quarter.

Tip # 2

Bring forward payment of your staff’s compulsory superannuation payments for the April to June Quarter.

To take advantage of this now you will need to make payment direct to their accounts (ie. Not via super stream) by Monday morning. Make sure you check with the fund that it will clear the employee’s account by 30th or it won’t be counted in the 2016 financial year.

Tip #3

If your profit for the 2016 year is high consider not rushing the invoicing of work by 30th June. If possible hold off invoicing until July.

It’s important to remember that this then increases your 2017 year income so if the profit in 2016 isn’t unusually high you are just passing the issue over to the next financial year.

Tip # 4

If you are planning on paying staff bonuses make sure these are processed before 30th June. The will need to be included in the last pay run of the year where the payment date is before 30th June. It is the payment date which determines if the pay period is included in the 2016 or 2017 financial year.

Tip # 5

If you meet the definition of a small business make sure you take advantage of the straight write off for purchases under $20k per item.

It’s important to ensure you are only purchasing an item that you need in your business, that is going to assist you in producing income and that you would have likely purchased sometime soon but have brought forward to take advantage of the deduction sooner. Don’t make a purchase for purchase sake.

Tip # 6

If you have a trust you will also need Trust Distribution Minutes prepared and this will require a review of your profit and any other income to determine what is the best distribution. This needs to be prepared and signed prior to 30 June 2016.

We would love to assist you to achieve your business goals in the 2017 financial year. Please comment below or send us a message for a complimentary discussion about your business and how we can assist you achieve your goals.

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