Maximise super contributions
All good things must come to an end. This is the final financial year for the $50,000 concession cap for people over 50. From July 2012 it will be halved ($25,000) and will be indexed in the future.
For anyone over 50, consider salary sacrificing up to $50,000 or make a lump sum contribution. Don't forget – if you are self employed then the super you have already contributed (nine per cent of your salary, if you are paying yourself a salary) is included in the total, so don’t go over this amount. If you do, you face being taxed at the highest marginal tax rate.
Even if you are under 50, you can still sacrifice up to $25,000 per year. It is a great tax-saving strategy, especially if you are using a financial planner to invest this money wisely.
Government co-contributions to super
If you or your partner earn less than $31,920 consider making a contribution of $1,000 to super and the government will match it, dollar for dollar. The co-contribution gradually decreases as our salary goes up from $31,920 until it is ceases at $61,920.
Small Business tax break
Small businesses are entitled to some great deductions and write-offs. You may, however, wish to make your purchases next year when the immediate write-off jumps to $6500, instead of $1000.
Pre-payments
- Bring forward any payments or repairs and maintenance to increase your deductions this year.
- Pre-pay 12 months worth of any expenses you can, such as rent.
- Put off invoicing and receiving payment for work till July so you defer the tax till next year.
- Review your asset register (a list of all the assets in your office/work space) and determine what items need to be replaced or have kicked the bucket. This also goes for obsolete or damaged stock.
Write off bad debts
If they aren't going to pay, then write the debts off and get the tax deduction for it.
ATO benchmarking
The ATO has issued a list of benchmarks that show what they believe your business should be able to prove in the way of income and expenses. If you fall outside their range, consider yourself a target to be questioned.
Personal Service Income
This is an area all Individuals, Companies and Contractors should be wary of. In short, if you receive more than 80 per cent or more of your income from one client you will be caught under the PSI rules. You should call your accountant to discuss this, as this can have varied effects of your deductions and personal income situation.
Small business concessions for Capital Gains Tax
If you are classed as a small business and sold your business this financial year, you may be able to claim a reduction in the amount of Capital Gains Tax payable on these transactions. If you have not yet sold your business but are considering it, contact your accountant to discuss the tests before you enter into a contract.
Flood Levy
This is a new tax introduced for the 2011–2012 financial year. Below is the table showing the amount of tax payable.
|
Taxable income |
Flood levy on this income |
|
$0 to $50,000 |
Nil |
|
$50,001 to $100,000 |
Half a cent for each $1 over $50,000 |
|
Over $100,000 |
$250 plus 1c for each $1 over $100,000 |
Get your super and tax affairs in order now and you’ll be as in-pocket as can be come next financial year.
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“ Small businesses are entitled to some great deductions and write-offs. ”
Brad Callaughan is a specialist in taxation, accounting and business advisory. He is the managing director of Callaughan Partners that was formed to deliver and exceed client’s expectations, whilst charging upfront fees.
