Our Tax Planning Tips to Help you Maximise your Return
It can be difficult to ensure you are getting the most out of your tax returns. At Kensington’s, we recommend working with one of our experienced accountants to construct a tax plan which will encourage more strategic decisions and help maximise your returns this tax time.
Tax Planning Tips
Now is a great time to review both your expected taxable income for the previous financial year 2019-20, and your forecasted taxable income for 2020-21.
If you are anticipating a higher income in the 2019-20 financial year, compared to your predictions for the following financial year, we recommend speaking to your accountant to consider:
- Repaying some of your 2020-21 expenses in the 2019-20 financial year.
- Making use of the instant asset write-off. This allows you to deduct assets you purchased new or second hand.
- Assessing and deferring some of your invoicing
- Topping up your voluntary superannuation contributions
- Re-evaluating your debtors and writing off any uncoverable debts
If you are anticipating a higher income in the 2020-21 financial year, we recommend speaking to you accountant to consider:
- Accelerating any invoicing
- Paying your expenses as they are due, rather than pre-paying them
- Purchasing any required equipment or business assets in the current financial year
Added Tax Tips for Small Business Owners
We recommend discussing the following additional tax planning strategies with your accountant:
GST Cash Accounting
This involves accounting for GST on a cash basis, rather than accruals. You will pay GST to the Australian Taxation Office when you collect it, not when you issue your invoice. GST Cash Accounting is helpful to increase cash flow.
Small Business Restructure Rollover
In cases where you are considering moving from a family partnership to a family trust, this tax planning strategy is beneficial. If you are a small business entity (SBE), you are eligible to transfer an active asset of your business to another SBE as part of a genuine business restructure.
Instant Asset Write-off vs Depreciation
The government introduced the instant asset write-off which helps small businesses with an annual turnover of less than $500 million.
Is Your Return Accurate and Recent?
An essential part of tax planning is ensuring that you have correct and up-to-date information. This could maximise your deduction and help you and your accountant to make well informed tax decisions.
- Reviewing the logbooks for your business vehicle to ensure they are current. If your existing logbook is over 5 years old or if your vehicle usage has changed considerably, you will need to start a new one.
- If your business holds stock, complete your stocktake as at June 30, 2019.
- Accounting for the private use of business assets.
If your business has been impacted by COVID-19, the Australian Taxation Office can support you by:
- Allowing you additional time to pay your debt or lodge your tax forms
- Helping you to locate your lost tax file number
- Re-releasing tax returns, activity statements and notices of assessment
- Accelerating any refunds owed
- Creating a payment plan personalised to your circumstances
- Settling penalties or interest charged during the time you have been impacted
At Kensington’s, we understand the complexities of tax legislation, small to medium business accounting, taxation, and auditing. We are able to guide you through the financial and legal intricacies associated with these areas. To find out more about our tax return tips to get the most back from your return, or to talk to one of our experienced accountants, contact us today.