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With the end of yet another financial year fast approaching, now is the final chance for small businesses to get their 2017 tax planning organised!
Here are a few tips to get you started with your end of year tax planning:
1. Do you need additional tax deductions?
Did you know that small businesses can prepay expenses such as rent, insurance, fuel & even bank interest for up twelve months in advance and claim a full tax deduction this year?
2. Not previously a small business?
With the small business turnover threshold increasing from $2 million to $10 million, many more business are eligible for the many tax advantages that come from being a small business.
3. Have you sold a capital business asset?
Make sure you carefully review your eligibility for the small business CGT concessions before the end of the financial year. These concessions can substantially reduce or even eliminate entirely any capital gains tax for your SME.
4. Are you considering purchasing a new asset?
Entering into a one or two year lease arrangement can offer a much larger up front tax deduction compared with financing the purchase using a chattel mortgage, or even paying for the asset in cash.
5. Do you want a free tax reduction?
Small businesses are eligible for an 8% reduction in their tax bill for 2017 up to a maximum of $1,000 per person, or if you trade through a company a drop in the tax rate to 27.5%. We’ve seen many cases where businesses haven’t claimed these tax reductions, so make sure you don’t miss out.
6. Make the most of Superannuation contributions
Super contributions can be a great tool for tax deductions. However, you must ensure you are eligible to make tax deductible superannuation contributions and that you stay within your contribution limits! Remember, the rules for superannuation are changing on 1 July, so make sure you are informed.
7. Take the time to review your business and asset ownership structures
Finally, consider whether your current business structure provides you with the most flexible tax outcomes. You should also review whether your business structure provides you with an appropriate levels of asset protection.
There are many, many more tax planning strategies small business owners can utilise. Obtaining the right advice can help you keep your 2017 tax bill to an absolute minimum.
The team at RSM can help get your tax planning ready
If you would like to know more about the tax planning steps or this article, please contact Jarrad Turnbull.
Alternatively, get in contact with your local RSM office today.