As an accountant, over the years, I’ve come across a lot of different situations. I was cleaning up a bunch of my old notes and as I filed them away, I started to notice some recurring questions and answers my clients would ask me. I’m going to warn you now – this is some valuable information – so don’t take it lightly!
Top 5 Tax Tips for Business
1. Structure: be sure you’ve set up your business structure the right way. If you’re not sure, then it’s time to ask! The wrong set up could be costing you a lot of money each year!
2. Cashflow Management: Towards the end of financial year (EOFY) each year, working out the best way to manage your cash flow is imperative! What should you spend now, and what bits will you hold onto to do later? If you don’t know which side of the line that EOFY expense should fall on, that could be costing you some serious cash.
3. Prepayments: Firstly, do you know what this is and what items are eligible for it? Prepayments can be made for entire balances, or for any upcoming payment, which is paid in advance; such as rent or loan repayments. This tip is often overlooked by businesses, which is a sad thing because it could help lighten your tax burden.
4. Accelerated Depreciation: Sometimes it’s worth writing off an asset faster than normal, in particular if you have a heavy tax load. Most businesses aren’t even aware this process exists!
5. Balance of Payments: Achieving the right balance between wages, dividend payments, trust distribution and loan repayments from your business entity is crucial. There are many ways to structure payments which could end up saving you thousands.
Were these tips helpful for you? Or was it like reading a foreign language? Don’t stress, me or my team can translate it for your specific situation, just pick up the phone for a no-hassle, chat on 1300 135 918.
Top 5 Tax Tips for Individuals
1. Investment Prepayments: If you’re a property investor, then paying interest in advance can be a big help at EOFY!
2. No Invoice Expenses: Be sure to take advantage of items which don’t require tax invoices, such as motor vehicle and travel. I bet some of you didn’t even know you could write off expenses without a receipt!
3. Non-cash Deductions: For those who own properties or are investors, using non-cash deductions such as depreciation and capital works can significantly lower your tax bill!
4. Investment Structure: You might not realise it, but having the correct investment income structure set up between yourself and your family members can help you maximise the best tax rate!
5. Salary Sacrifice: This is also referred to as “Salary Packaging” which includes benefits in your remuneration package in exchange for giving up some part of your cash salary. Items that can be included in this are motor vehicles, superannuation, portable electronic devices, and more.
Although my tips here apply to many, they will most definitely differ from person to person. Why? Because everyone’s situation is different; that’s why me and my team offer tailored advice for our clients. Part of what we love to do is help – which is why we’re always happy to have a chat to assist you!