End of year finance matters
How time flies. We are at the end of another financial year. Here is a list of things a small business owner should look at before June 30.
Look at the timing of your revenue and expenses. Depending upon your financial position and how your revenue is assessed, you may wish to delay invoicing so the revenue doesn’t count this year. You may also be able to prepay business expenses under $1,000 or salaries if you want to increase your allowable deductions in this year. Consider bringing forward repairs and maintenance or other expenses. If you purchase assets worth less than $300 you can take advantage of an immediate deduction.
Do a stocktake and scrap trading stock that is obsolete. The lower the value of your stock on hand the less your business income will be.
On the staff front, pay leave loading. Unpaid accrued leave loading is not tax deductible. Register new employees with the Office of State Revenue and you may be eligible for a new $4,000 rebate. If your current total wages is below the payroll tax threshold consider paying more wages or bonuses to reduce taxable business profits.
Scrap assets you no longer use so you can claim a deduction for the remaining undepreciated value. You can also pool assets worth less than $1,000 and get a flat 18.75 percent deprecation deduction.
From July 2012, the immediate write-off threshold will increase from $1,000 to $6,500. It may be worthwhile waiting to purchase a new asset valued within that range. Small businesses can also claim an immediate deduction of $5,000 for a motor vehicle if it is purchased after July 1.
Finally, remember to contribute to Super. Contributions up to$25,000 are taxed at 15 percent rather than your marginal tax rate. If you are over 50, this is the last year you can contribute a higher amount of $50,000.
See your accountant for advice for your specific circumstances.
Greg Taylor is Chief Financial Officer for the Hunter-based Greater Building Society. This article appeared in the Newcastle Post June 27 2012