General Tax Planning – Pre 30 June 2015
Another financial year has almost come to an end and we provide you with the general tax planning for the 2015 financial year.
Defer Assessable Income
To utilise this strategy of delaying income, you should check the items of income that are likely to be received during the last month of the tax year. Is it possible to delay some of this income into the next year? Note: there would be little point in deferral if it pushes you in to a higher tax bracket in the later year, resulting in more overall tax being paid. If you are currently invoicing, you can delay the invoice and collection until after year end.
Deductible Expenses
Please ensure that appropriate expenses or made the appropriate donations are paid by 30th June 2015 to maximise the deduction.
Capital Gains Tax
If you have made a capital gain during the year on the sale of shares or disposed of property, please ensure that you dispose of any asset which is showing as the capital loss in that period to offset the effect of the gain as not match losses with the gain the same period can result in paying tax and carried forward losses.
Tax Payment
If you believe the ATO instalment have over-estimated your 2015 tax liability, you have the ability to vary the amount in your final BAS/IAS for the year end on 28 July 2015. If you miss this opportunity, you will have to pay the tax and lodge a tax return to obtain a refund.
Prepaying Expenses
Rules introduced from 2004 year mean that only small businesses can prepay business expenses for up to 12 months and receive a full deduction this year. Therefore small businesses continue to have the option of taking up a deduction in the current year that would normally fall in the following year.
Accelerated Deductions Where Possible
Rules introduced in the 1999/2000 year mean that small business entities (turnover under $2 million) can prepay business expenses and receive a full deduction this year. Other businesses are not able to claim prepayments in this tax year. For small business entitles, prepaying expenses remains a powerful year-end tax planning strategy
$20K Immediate Write Off
Small business entities (operational businesses with an aggregated turnover below $2 million) have access to a range of tax concessions. These concessions provide additional opportunities to maximise your tax deductions including immediate deductions for
- Depreciable assets, including software, costing less than $20,000 (excluding GST) and purchases after 7:30 PM 12th May 2015
Division 7A – Benchmark Interest Rates
For the purposes of Division 7A of Part III of the Income Tax Assessment Act 1936, the benchmark interest rate for an income year is the ‘indicator lending rates – bank variable housing loans interest rate’. This rate was last published by the Reserve Bank of Australia before the start of the income year.
| Year of Income Ended 30 June | Div 7A ATO Benchmark interest rate |
| 2015 | 5.95 % |
| 2014 | 6.20 % |
| 2013 | 7.05 % |
| 2012 | 7.80 % |
Superannuation Guarantee June Quarter
must be paid July 28th
Superannuation paid by an employer for the benefit of eligible employees must have been paid by 30th June if a deduction is to be claimed in the same tax year. It is also good practice to ensure that the cheque is cleared by 29th June (direct bank transfers cannot be guaranteed to be received by the super fund on the same day).
Super guarantee charge percentage (%)
| 1st July 2013 – 30th June 2014 | 9.25% |
| 1st July 2014 – 30th June 2015 | 9.50% |
| 1st July 2015 – 30th June 2016 | 9.50% |
| 1st July 2016 – 30th June 2017 | 9.50% |
DISCLAIMER
The matters covered in this newsletter are meant for general discussion only and are not intended as advice. No ready should act on the basis of information in this newsletter without first seeking professional advice relating to their own particular circumstances as Taxation laws are very complex and subject to constant and repaid change.