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30 June
2017
ATO NEWS AND UPDATES BUSINESS TIPS SMALL BUSINESS TOPICS
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2017 End of the Financial Year Tax Tips

It’s the end of the 2017 Financial year and you might be asking yourself a number of timely questions.
Where did this financial year go?
How am I going to get everything completed in time?
What should I have completed between now and the 30th June 2017?
The best way to go forward in the 11th hour, is to plan your 2018 year NOW!
Then put the time aside to ponder on your business situation.
Here are our End of Financial year TIPS
 
Financial Tax Tips 2017 

1. Are your financial records in order? 

Your answer should be “yes” .

If you have answered “NO” to the above, you have a problem that must be addressed and fixed.

Make it your priority for the next financial year 2017/18 to begin a structured record keeping process.

The moment you begin trading as a business, you are legally required to keep accurate records for all your business transactions.

This means using a cloud or software based system to record these transactions, and ensure they reconcile to your bank, petty cash and/or credit card statements.

2. Do you need to perform a stocktake?

This needs to be completed as at the 30th June 2017.

  • Small stock holders may not need to do a stocktake..
  • Everyone else needs to complete a physical stocktake at the 30th June 2017.
  • ATO (should they audit) requires physical proof and evidence to substantiate any figures.

ATO Link  https://www.ato.gov.au/Newsroom/smallbusiness/General/Do-you-need-to-do-a-stocktake-this-financial-year-/

TIPS

Once you count your stock, there are more than one way to account for it’s value. You are legally able to account for the cost of each item on a individual or group basis according to their lowest value. Here are some ideas as to how to do this.

  • Is the item old or outdated? You can value that item accordingly, even under it’s replacement cost.
  • What items are damaged, obsolete or dead? Then write these off for this financial year
  • Chose what applies the market value of the item or it’s replacement cost? confirm with your accountant if unsure.

Write off bad debts

3. Bad Debts

If you are on an accrual basis you can write off bad debts.

TIPS

  • Put it in writing in the form of minutes as the director that this debt will be written off as of the 30th June 2017.
  • Apply the bad debt to your Debtor’s ledger
Question : If you are a sole trader or individual with bad debts can you also write these off?
Yes, the same rules apply

4. Plant and Equipment

Take a good look down your asset list or depreciation schedule.

What items do you no longer use, but still appear in the accounts?

Example : You have old machinery sitting in the shed you no longer use.

A. You can continue to depreciate them until they become zero

B. Write the entire balance off in this financial year.

This can also apply to fixtures / fittings, old machinery, computers and tools that you have either updated or replaced.

 Pay the superannuation before 30th June

5. Superannuation

If you pay superannuation guarantee for yourself or employees on a quarterly basis, you may want to consider to pay the full amount of the SG before the 30th June 2017 to use it as a tax deduction in this financial year.

https://www.ato.gov.au/business/super-for-employers/

6. Bonus and Directors Fees

The company needs to commit to any director fees or bonus in the current financial year and is not required to physically pay them all by the 30th June 2017 to use them as a deduction..

TIP

  • The company needs to commit to the bonus or director’s fee before the 30th June 2017
  • No tax is required to be paid on the amount until it is physically paid out
  • Resolution in writing by the directors/owners notifying the recipient that this amount will be paid to the individual concerned.
Question : Is the director’s fee still a tax deduction if it is a SBE entity?
Yes
 
Question : Can it be paid physically into a loan account instead?
Yes, it can be paid against a loan account.
A letter of instruction should be supplied stating this and the applicable withholding tax paid for the amount in question.
 
 Prepay 2018 financial year expenses

7. Can you purchase consumables and claim them as a deduction in this financial year?

Items like staff admenities, stationary, printing and other day to day consumables required to run a business can be pre-purchased and used as a tax deduction if paid for by the 30th June 2017.

8. Other “TIPS” for for SBE’s

(Small Business Enterprises less than 2 million annually)

Question : I’ve had a very profitable year, can I prepay any services to use as a deduction this financial year?

You can pre-pay up to 13 months in advance for services and claim them in this financial year.

Examples : Rent, lease repayments, advertising, monthly equipment hire etc…..

NOTE : Ensure that you have sufficient cash flow to continue paying all your expenses into the new financial year.

Depreciation Rulings you can use…

Have you or are you going to purchase a new car by 30th June 2017?

Items like a computer, machinery or equipment can be written off immediately up to $20,000 each.

(See ATO link below for more information https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Get-your-$20,000-instant-asset-write-off/)

 

Plan 2018 financial year

9. What changes do I need to be aware of for 2017/18 financial year?

Superannuation remains at 9.5%

Temporary Budget Repair Levy  Is no more

Medicare levy low-income threshold increased. 

Car Limit  2017-18 is $57,581.

Luxury Car Tax Limit 1 July 2017 the luxury car tax threshold for luxury cars increased to $65,094.

Threshold for fuel efficient luxury cars for the 2017-18 financial year remains at $75,526.

10. Bookkeeping and Tax Agent Concerns

The “cloud” technology of bank feeds are making financial reporting more “real time”, reducing cost and time.

This also makes it affordable for any small businesses to have a bookkeeper and keep accurate records.

This empowers the small business owner to be educated about their financials, plan their tax obligations and have strategies in place to improve their financial future.

With the improvements of technology and social media there has never been a better time to be in business.

Information is as easy as a click away, along with new opportunities and growth on a global scale.2017/18 year will in our opinion be a challenging year for business and consumers alike.

Ensure that you have accurate, real time record keeping processes in place, so that you have an enormous competitive “edge” over your competitors.

This information will also allow you as a business owner to change strategies quickly to realise new opportunities when they appear.

 

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ATO LINKS

$20,000 SBE concession 2017/2018 financial year

https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Get-your-$20,000-instant-asset-write-off/

Cars and Tax

https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Cars-and-tax/

PAYG Tax Tables

https://www.ato.gov.au/rates/tax-tables/?utm_campaign=taxtables-062017&utm_source=sbn&utm_medium=promotion&utm_term=sbn-taxtables

ATO Webinars for Small Business Owners

https://www.ato.gov.au/general/webinars/annual-tax-obligations-for-employers-webinar/?utm_campaign=taxtables-062017&utm_source=sbn&utm_medium=promotion&utm_term=sbn-annwebinar

Are you Claiming GST credits correctly?

https://www.ato.gov.au/Newsroom/smallbusiness/GST-and-excise/Are-you-claiming-GST-credits-correctly-/

Amanda Hoffmann is a registered BAS Agent No.18613005, Associate of Finance, Xero Certified, Myob Essentials and Quickbooks partner.

She says she is more than just a bookkeeper with experience in real estate investing, social media, podcasting and blogging.

Amanda loves to teach and that is why she can encourages you to use Xero, QBO or Myob Essentials with your own day to day bookkeeping.




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