Are you a business owner who wants to save on tax this financial year? Here we’ve listed a few simple strategies to decrease the amount of tax you may pay this financial year. These strategies will help you to save thousands of dollars. So, don’t leave your tax planning to the last minute. Follow the given tips listed below from a leading accounting firms in Mandurah to save more on taxes this year.
Defer Tax Liability
Hold off your invoices until July 1 if your cash flow allows, to defer tax liability to the next financial year. Also, keep track of the tax bracket of the previous financial years to make sure that you aren’t taxed at a higher rate on the deferred income.
Claim Before you Spend
Did you know you can claim for things that you haven’t paid yet? Yes, a business can get an immediate deduction for expenses that aren’t paid until June 30. This includes staff bonuses, director’s fees, claim repairs, and maintenance.
Make Payments before June 30
Bring forward expenditures and ask for the invoices for staff training, donations, insurances, and more that will incur after June 30. You can also reduce tax liability by making payment for property repairs and maintenance before June 30.
Superannuation
When the superannuation for the June quarter is paid before June 30, you can claim the deduction, and you don’t have to wait a whole year to minimize your tax payment. You can also reduce your income tax bill by putting more money into a superannuation pot. So, contribute as much as you can to your superannuation plan but make sure you don’t exceed the contribution cap. Our tax accountants in Mandurah can explain to you how much you can contribute every year.
Stock Value
Did you know the higher the stock value of your business, the higher the profit you get? So, if you have any weak or expired stock that you can’t sell, you can claim it before June 30 to get a considerable amount of tax deduction this year.
Bad Debts
Even if you have not been paid, your income tax is payable for all the invoices you’ve issued that year. So, make sure to pay tax on invoices that you will get paid. Always, review your spending and write-off bad debts.
Loan Agreement
Have you borrowed loans from private companies? Our Mandurah accountants ensure that you have a proper loan agreement to make sure that minimal payments and interest repayments are made before June 30.
The Bottom Line
You can improve your tax position by prepaying expenses, buying assets, and making a contribution to your super fund. But, beware! It can affect your cash flow. So, talk to our Mandurah accountants to get a strategic plan that helps you to save money on tax deductions.