16 End of Financial Year Tips to Minimise Your Tax & Maximise Your Profit

Is it that time of year already? The end of financial year is fast approaching and that means getting all your paperwork ready.

Here is a checklist of 16 MUST-DO’s before end of financial year to help minimise your tax and maximise your profits.

1. Review Business Progress

Review your Profit & Loss Statement for period ending March/April. Check with your trusted financial advisor (bookkeeper and accountant) on how you are doing for the current financial year. 

Mark it in your diary to do this every March/April!​

2. Review Superannuation for Directors

For directors under 49 years, the maximum contribution is $30,000 and for over 49 it is $35,000. (2017 year). Discuss with your accountant.

3. Review Assets

Review the list of assets in your business and remove obsolete or defunct items. 

4. Review Cashflow

Look at your cashflow for additional tax deductable purchases (must purchase before June 30). Review the Integrated Balance Account (monies owed to the ATO) - can this be paid off by 30th June?

5. Review Business Processes

Sometimes changes are required to your business processes or procedures. Assess whether any changes are needed that can help your business establish timelines and complete work. If there is room for improvement, look at upgrading or changing your software before end of financial year.

6. General Tax Checks

If the business' cash flow is good, then it may make sense to spend on extra expenses before June 30 to maximise your deductions.

7. Service Equipment 

Get the cars serviced and replace the tyres! If you have other equipment in your business, ensure they are serviced before end of financial year.

8. Settle All Invoices

Pay everything: the membership fees, subscriptions, insurance bills etc. 

Another great idea is to get a discount on rent by prepaying for a period.

Also don't forget to pay yourself additional wages and superannuation.

9. Last Years Return

Ensure last year is finalised - has last years tax return been lodged? Do you have a copy?

10. Check Adjustments

- Are all adjustments from last year processed? 
- Have you adjusted the data file for any impact of the end of the FBT year?
- Have you adjusted the data file for any adjustments by the accountant?

These may be questions you review with your trusted advisors.​

11. Private Usage Adjustments

A once per year adjustment for private expenses are possible. 

The tax agent may have included an adjustment in last year’s final tax returns for disallowing private expenses – has the GST adjustment been made? It is absolutely acceptable to claim all GST on all taxable purchases for a business or enterprise during the year, if turnover is less than $2m, even if a portion of the expenses are for private use.

The ATO allows a once a year adjustment to reduce the amount of GST claimed. When the Tax Agent has completed the end of year tax returns and informed the amount of private expenses, then make a GST claim reduction in the next BAS. Therefore you will have only claimed back the GST on the business portion.

So if you are advised there was $1100 of private expenses, then reduce your next GST claim by $1100/11 = $100.

You do not have to inform the ATO, just keep the records. If you post the totally private expenses to the loan account and don’t claim any GST back at the time of purchase that is okay as well.

12. Stock/Inventory

Review stock list in detail including when the item last sold and at what price. Consider discounting any slow moving items to sell them and realise the cash.

13. Stock Write Off

Write off the value of stock that won't sell. It's important that  you take a full stock count at 30 June and enter through Stock Count and Inventory.

14. Plant & Equipment

Adjust as required Existing Plant and Equipment:
- Obtain the list of assets the accountant uses to calculate depreciation
- Review the list and remove items that no longer exist or are obsolete
- Highlight to your accountant, any items sold

New Plant and Equipment:
- Businesses are permitted to write off Plant and Equipment that cost less than $100 (incl. GST)
- Businesses with turnover less than $2m using Small Business Entity Concessions should highlight assets bought under $20,000 to their accountant (must have been purchased that financial year)
- GST reporting of Capital Acquisitions (G10) threshold is $1,000 Before End of Year

15. Payroll

Time for payroll checks!

- Ensure you check the maximum amounts of superannuation

- If you are processing the payroll for businesses, it is wise to check that no employee receives more than the maximum superannuation contribution, unless instructed by the employee’s financial planner or accountant to do so.

– Under 49 years maximum contribution is $30,000 and over 49 it is $35,000.

– If employees or owners appear to be near or over the maximum the bookkeeper should notify the person in question

16. Superannuation

Maximise those tax deductions - Superannuation.
While Superannuation Guarantee is not due till the 28th of July, in order to get the income tax deduction in this financial year, the superannuation must have been paid through your bank account before 30 June

Summary

If you’re not sure how to check each of these items don’t worry, you are not alone!

Our team is made up of small business owners, certified accountants and bookkeepers so we have all the expertise in house to help you maximise your profits and minimise your tax.

We can give you the right advice and information so you can make healthy decisions for your business.

Call us today to discuss your specific business and how we can work to minimise your tax for this financial year.

Disclaimer: All or any advice contained in this newsletter is of a general nature only and may not apply to your individual business circumstances. For specific advice relating to your specific situation, please contact your accountant or contact OzAccounts for further discussion

About the Author Josephine

Jo Roberts in a cloud integration magician. With over 20 years experience in business, Jo is passionate about ensuring business owners know exactly how they are tracking with their money. Jo also holds partnerships with the major leading software systems: Xero Silver Advisor, MYOB Certified Consultant, Intuit QBO Pro Advisor, Reckon Accredited Consultant... and many more!

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