Top tax tips to (legitimately) reduce your business tax bill
6. Take advantage of the Small Business Entity (SBE) concessions
If the turnover of your business is less than $2 million then there are some great tax concessions that you can get including:
- Immediate write-off for assets costing less than $1,000 (which is set to rise under the proposed Henry Tax Review to $5,000)
- Immediate deduction for prepaying expenses such as lease payments, interest, rent, business travel, insurances and subscriptions up to 12 months in advance by 30 June.
7. Don’t spend purely for a tax deduction
There are so many people that get caught out at this time of the year in spending money purely to get a tax deduction. If you are running a business via a company then you are only getting 30 percent back. If you want a $100,000 tax deduction then I will gladly invoice you and accept payment. Why spend money when you only get a fraction back? Don’t get caught out by the fancy marketing of retailers in coming weeks. Always think of my A-B-C motto: Absolute Bloomin’ Cash.
8. Pay employee super
In order to obtain a tax deduction in the 2010 financial year for employee superannuation contributions, the contribution must to be received by the superannuation fund by 30 June 2010.
9. Private company loans to shareholders
If you have borrowed funds from your company, ensure that the appropriate principal and interest repayments are made by 30 June. Non-compliance with the strict ATO rules will result in the entire loan amount being deemed as an unfranked dividend paid and taxed at marginal rates. The private use of certain company assets (such as boats and cars) is now also potentially caught by the taxman unless a market rental fee is paid.
10. PAYG instalments
If business has been tough this tax year, consider varying the PAYG instalment for the June 2010 quarter.