With the end of financial year approaching, now is the time to put in place any final strategies to reduce taxable income. The following are simple but effective ways to legally reduce income tax for taxpayers big and small.
BUSINESS
Defer Income – consider deferring the issuing of invoices until after 30 June where it is optional to do so such as work in progress or interim invoices and makes sense.
Asset purchases – there is an immediate deduction for assets acquired and first used before 30 June 2023 and no limit on the cost of new assets. In addition, if your turnover is less than $50M then you can also immediately write off second-hand assets.
Bad debts – review any old debtors and write-off before 30 June. Make sure you have made some attempts to recover the debt.
Stock – complete your stocktake before 30 June and write off any obsolete, expired or unusable stock before 30 June 2022 and reduce your stock on hand figure.
Superannuation – don’t miss out on getting a tax deduction in 2022 for your employee’s superannuation. Pay the June quarter before 30 June.
SMALL BUSINESS
For small business entities with turnover less than $50M the following tax concessions are available:
Prepayments – there is an immediate deduction for prepayments of expenses for a period of up to 12 months.
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