Be aware that 30 June 2019 is a Sunday so review your tax affairs now and consider making strategic decisions for your business.
Always ensure that you consider the cash flow impacts to your business and if the new assets/expenses are prudent business strategies. If you are considering the expenditures, then timing in June versus July is important.
- Evaluate your profit and loss position and determine estimated taxable income.
a) For a small business entity with a turnover less than $10 million, tax deductions are available for prepayments of expenses for services to be rendered within a 12 month period and instant asset write offs of up to $30,000.
b) For a business with aggregated turnover less than $50 million, the $30,000 instant asset write off is available for assets purchased from 3 April 2019 if installed ready for use by 30 June 2019 or 30 June 2020.
c) Ensure final superannuation contributions (limit of $25,000) are received /deposited by the Superannuation Fund before 30 June 2019. We recommend immediate action on this. Superannuation Guarantee Contributions are not due until 29 July for payment but will be deductible if paid before 30 June 2019. Employees /individuals may make personal concessional contributions to their superannuation fund subject to the total cap of $25,000 and do not have to rely on salary sacrifice arrangements.
d) Review debtors and write off any bad (not just doubtful) debts before 30 June 2019.
e) Review stock on hand and any obsolete stock.
- Review of all inter-entity loans and sub-trust arrangements. Ensure the minimum yearly repayment(s) required for Division 7A purposes are met – whether by cash payments or the declarations of dividends, if appropriate. A shortfall of payments for Division 7A purposes may result in a deemed unfranked dividend being assessable.
- Trustee resolutions to distribute trust net income to beneficiaries, and to determine classes of income (if appropriate), should be drafted and signed before 30 June 2019. Trustees of family trusts and closely held trusts must report the TFN of any new beneficiaries to the Australian Taxation Office by 21 July 2019.
- Capital Gains/Losses – If you have incurred a capital gain during the year, review your other liquid assets (shares) to see if any capital losses may be triggered to offset in the current year, if appropriate.
Contact us if you have any queries in relation to these or any other tax related issues for 2019. With the end of financial year now fast approaching, remember to action what you need to quickly, as Friday 28 June 2019 for year end is only one week away.