2012 Business Tax Planning Strategies

The end of the 2011/12 financial year is almost here, so now’s the time to review what strategies you can use to minimise your tax.

Be prepared to substantiate your claim.

1. Concessional Superannuation Caps

The concessional superannuation caps for 2012 are $25,000 for persons under age 50, and $50,000 for persons aged 50 and over. Do not go over these limits or you will pay more tax!

Note that employer super guarantee contributions are included in these caps. Where a contribution is made that exceeds these limits, the excess is taxed to the fund member’s account at an effective rate of 46.5%.

In order to claim a tax deduction in the 2012 financial year, the contribution must be received by the super fund by 30 June 2012.

2. Tools of Trade / FBT Exempt Items

The purchase of Tools of Trade and other FBT exempt items for business owners and employees can be an effective way to acquire equipment with a tax benefit. Items that can be packaged include Handheld/Portable Tools of Trade, Notebook Computers, Personal Electronic Organisers, Mobile Phones, Digital Cameras, Briefcases, Protective Clothing, and Computer Software.

You should buy these items before 30 June 2012.

3. Employee Superannuation Payments

To claim a tax deduction in the 2012 financial year, you need to ensure that your employee superannuation payments have CLEARED your business bank account by 30 June 2012.

4. Defer Income

Where possible, defer issuing further invoices and/or receive cash until after 30 June 2012.

5. Bring Forward Expenses

Purchase consumable items BEFORE 30 June 2012. These include stationery, printing, office and computer supplies.

6. Repairs & Maintenance

Make payments for repairs and maintenance (business, rental property, employment) PRIOR to 30 June 2012.

7. Motor Vehicle Log Book

Ensure that you have kept an accurate and complete Motor Vehicle Log Book for at least a 12 week period. The start date for the 12 week period must be on or before 30 June 2012. You should make a record of your odometer reading as at 30 June 2012.

8. Defer Investment Income & Capital Gains

If possible, arrange for the receipt of Investment Income (e.g. interest on Term Deposits) and Contract Date for the sale of Capital Gains assets to occur AFTER 30 June 2012. The Contract Date is the key date for working out when a sale has occurred, not the Settlement Date!

9. Investment Property Depreciation

If you own a rental property and haven’t already done so, arrange for the preparation of a “Depreciator” Report to allow you to claim the maximum amount of depreciation and building write-off deductions on your rental property.

10. Private Company Loans

Business owners who have borrowed funds from their company must ensure that the appropriate principal and interest repayments are made by 30 June 2012. Otherwise the ATO may use its discretion and treat it as an unfranked dividend.

11. Stock Take / Obsolete Stock / Work in Progress

If applicable, you need to prepare a detailed Stock Take and/or Work in Progress listing as at 30 June 2012. All stock items should be reviewed for its carrying value and scrap value. Remember to keep and file all relevant documentation to support your decisions.

12. Write-off Bad Debts

Review Trade Debtors listing to write off all Bad Debts BEFORE 30 June 2012. Prepare a minute of a Director’s meeting listing each Bad Debt as evidence that these amounts were actually written off prior to year end.

13. Small Business Concessions – Prepayments

For Small Business Concession taxpayers, you can make prepayments (up to 12 months) on expenses BEFORE 30 June 2012 (e.g. Rent, Interest on Loans) and obtain a full tax deduction in the 2012 financial year.

14. Work from home

Taxpayers that work from home may be able to claim a percentage of home related expenses.

15. Fixed Assets

Review your fixed asset register and determine if there are any benefits in scrapping or trading in assets before year end.

Talk to us TODAY before the 30 June 2012 deadline for assistance to reduce your tax!

JWA Business & Wealth

 ’The Rocket’ Suite 1101 Level 11
203 Robina Town Centre Drive
Robina, QLD 4226

T: (075) 585-8555

E: info@jwa.com.au

The information in this document is of a general nature and does not take into account your individual needs and objectives. Please do not act on any information in this document before seeking advice from a qualified Accountant and a licensed Financial Planner.