End-of-year checklist

June 16, 2016

Capital losses
Selling poor performing assets may enable you to bring forward a tax loss that can be offset against any capital gains made throughout the financial year.

Write-off bad debts
Bad debts can be used to offset taxable income if they are written off before 30 June and provided they have been previously included as assessable income.

Prepaid expenses
Small business entities and individuals may bring forward deductible expenses such as rent, repairs and office supplies, that cover a period of no more than 12 months.

Company tax cut
The small business company tax rate has been reduced from 30 per cent to 28.5 per cent for income years commencing on or after 1 July 2015. The maximum franking credit that can be allocated to a frankable distribution will remain unchanged at 30 per cent on all taxable income, even if a small business is eligible for the 28.5 per cent tax rate.

Trust resolutions
Trustees of discretionary trusts must make and document resolutions by 30 June in relation to how trust income will be distributed among beneficiaries.

Defer income
Businesses that return income on a cash basis may benefit from delaying the “receipt” of the income until after 30 June. Businesses that return income on a non-cash basis may benefit by delaying the “issuing of invoices” until after 30 June.

Employer contributions
Ensure all superannuation guarantee contributions for employees are up to date and pay contributions before 30 June.

FBT for work-related devices
An FBT exemption will be allowed for small businesses providing their employees with multiple portable work-related electronic devices from 1 April 2016, even where the devices have similar functions.

Primary producers
From 12 May 2015, primary producers can immediately deduct the costs of fencing and water facilities. The cost of fodder storage assets can also be deducted over three years.

Under $20,000 asset write-off
Small business entities (turnover under $2m) can write off purchases less than $20,000 immediately (in the year of purchase), if it was purchased after 12 May 2015.

Write-off obsolete stock
Write-off slow moving, old and damaged stock by June 30 for an immediate tax deduction. Obsolete stock must be physically disposed of for income purposes to receive a deduction.

Start-up expenses
From 1 July 2015, small business entities starting up a business are entitled to immediately deduct a range of expenses associated with starting a new business. The deductible expenses include professional, legal and accounting advice, and government
fees and charges.

For more information, contact us at Leenane Templeton on 02 4926 2300 or email success@leenanetempleton.com.au




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