In this sponsored post Chartered accountant GAIL FREEMAN offers some financial year-end tax tips.

Prya dropped by to ask if there was anything she could do to minimise her tax for this, closing, financial year. I told her, yes, it wasn’t too late for some things, but it might be for others.

And I gave her a quick rundown: “You should be able to make tax-deductible donations to appropriate organisations up until June 30. Although if you leave it until the last minute, it would be prudent to ring and check that it’s not too late.

“You may be able to make tax-deductible superannuation contributions before June 30. If you’re contributing to an external fund, it will have a  close-off date, so check with the fund directly.

“If you are making contributions to a self-managed fund the only proviso is that the payment has to be cleared by June 30.

“Another change brought in this year is that you can claim the cost of any depreciable items that you buy for your business outright. So if you purchase a car tomorrow you can write that cost off in full.

“Of course, when you sell that vehicle down the track you’ll have to bring in the full selling price as profit at that time. So, in the case of a big-ticket item, such as a car or a computer system, you should weigh up whether it’s better this year or next as this full-expensing option will still be available during the 2022 financial year.”

Prya was warming to the subject and was keen to know if there was anything else that could be helpful.

I told that, as she ran her business through a company, there were also a couple of things relevant to companies she might find helpful.

“The first one is for small businesses, of which you are one: the company tax rate goes down next year so it could be beneficial for you, as you record your income on a cash basis, to defer any additional income until next year,” I said.

“Send out new invoices after July 1 so the income is included in your 2022 figures. Alternatively, you could spend more money before June 30 to reduce your 2021 income.

“The other useful provision for companies is the loss carry back provision. You might be aware that you can carry losses forward but there is a special provision that allows you to carry your losses back and get a refund of tax paid in the prior years.

“You can only carry your loss back to the 2019 year and the amount of tax that can be refunded is limited to the franking-account balance so you will need our advice if you decide to use that provision.

“I should also point out that last year people were confused because they were not provided with their payment summaries. This will be the same in 2021 because of Single Touch payroll.

“However, we can access your payment summaries and your health-fund statements from the ATO site, as your tax agent. So don’t be concerned if you are not provided with them.”

Prya said she was off to check out a new car, saying: “I’ll see you in the new financial year.”

If you need help with last minute tax planning or any other tax matter, contact the friendly team at Gail Freeman & Co Pty Ltd on 6295 2844, email info@gailfreeman.com.au or visit gailfreeman.com.au

Disclaimer

This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.