2019 EOFY tax planning checklist
End of financial year is coming up quickly, but there’s still time to get your tax in order.
Whether you are a business operator or an individual, here are some of the better strategies for you to consider during your end of financial year tax planning.
Note that this year, 30 June falls on a Sunday, so you will need to have your strategies in place by Friday 28 June. And remember also to get your superannuation EOFY-ready for a stronger financial future.
Business
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| If you……. | You may want to | So you can | |
|---|---|---|---|
| Count your stock | Have a business that holds stock | Ensure you do a stocktake on 30 June and keep a record of the market, cost and replacement values | Use the value which gives you the best tax outcome possibly saving you tax, or deferring paying tax |
| Write off obsolete stock | Have a business that holds stock | Write down or dump obsolete or damaged stock prior to 30 June | Save paying tax on stock you don’t actually have! |
| Pay staff super | Employ staff | Pay their April – June super before 30 June 2020. The funds must reach their super accounts before 30 June 2020 | Bring forward your tax deduction to 2020 |
| Single Touch Payroll (STP) | Employ staff | Perform the End of year finalisation of your payroll in your STP software. Advise employees their income details are on myGov | Ensure you are not penalised for late lodgement Advise employees that they can complete their tax returns |
| Taxable Payments Annual Report | Operate in one of the following industries: • Building & construction • Cleaning services • Courier services • Road freight services • IT services • Security, investigation or surveillance services AND make payments to contractors | Ensure that you have completed and lodged your report prior to 28 August 2020 | Ensure you are not penalised for late lodgement |
| Instant asset write-off | Operate a “small business” (turnover less than $500M) | Claim a deduction for the business portion of each asset (new or second hand) purchased and first used or installed ready for use, up to the following thresholds: Turnover less than $50M • $30,000, from 7.30pm (AEDT) on 2 April 2019 until 12 March 2020 Turnover less than $500M • $150,000 and first used or installed ready for use from 12 March until 30 June 2020 | Continue to expand and improve your business with new or second hand assets |
| Prepare some estimates | Have business or investment income income varied from last year. Have your children or other beneficiaries turned 18 or had a significant change in income since last year | Contact our office before 30 June 2020 so that interim estimates can be prepared for the 2020 financial year before it ends | Take any actions necessary to increase or decrease your income where possible to minimise tax payable. Ensure you know what your tax position is so that the correct amount of tax is set aside Vary your June 2020 PAYG instalment to help cashflow if profit is down |
| Prepay expenses | Operate a “Small Business” (turnover less than $10M) | Prepay expenses for up to 12 months | Bring forward your tax deduction to 2020 |
| Trustee’s distribute income | Operate your business or own investments in a trust | Keep an eye out for your end of year distribution resolution that will be sent to you in the next few weeks | Ensure profits are distributed in the most tax effective manner. Meet the ATO’s requirements that this resolution be made prior to 30 June 2020 |
| Update your assets | Have depreciating assets not in an asset pool | Check the list of assets provided with last year’s financial statements and advise of any items that have been destroyed or sold | Claim a tax deduction for the balance of the asset value this year |
| Write off bad debts | Have debtors who have not paid their accounts, have been chased and are not likely to pay | Write off the debt in your books prior to 30 June 2020 | Claim a tax deduction for the bad debt this year |
This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Bentleys strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based on their own personal circumstances.
Individual
Download this checklist here
| If you... | You may want to | So you can | |
|---|---|---|---|
| Gain from a capital loss | Realised a capital gain from an investment | Trigger a capital loss by selling a poorly performing investment that no longer suits your circumstances | Use the capital loss to offset your capital gain and save tax Free up money for more suitable investment opportunities |
| Defer asset sales | Are thinking of selling a profitable asset this financial year | Defer the sale contract until after 30 June | Defer paying Capital Gains Tax Possibly reduce your capital gains tax liability |
| Prepay investment loans | Have a geared asset such as a rental property or an investment portfolio | Prepay 12 months interest on your investment loan | Bring forward your tax deduction |
| Private health insurance rebate | Expect to earn over $90,000 (individuals) or $180,000 (families) | Check what rebate you are receiving from your private health fund | Make sure you don’t get a surprise bill when your tax is prepared |
| Pay for insurance and avoid paying a surcharge | Expect to earn over $90,000 (individuals) or $180,000 (families) | Take out an eligible private hospital insurance policy | Save paying the Medicare Levy Surcharge of between 1% to 1.5% of your income in the future financial years |
| Start a new log book | Use a vehicle for work purposes | Commence maintaining a log book before 30 June | Maximise the amount you can claim for the business use of your vehicle |
| Read your odometer | Use a vehicle for work purposes and claim using the log book method | Ensure you take the odometer reading on 30 June | Continue to use the log book method to claim the business use of your vehicle |
| Obtain a Depreciation Report | Own a rental property | Contact a quantity surveyor and obtain a depreciation report if you don’t already have one | Claim for the decline in value of the assets in the rental property, and the building itself NB: Depending on the age of the property and when it was purchased. Legislation around depreciation recently changed, so please speak with your accountant about your personal situation |
| Donate | Are considering make a donation | Make the donation before 30 June | Bring forward the deduction to 2020 |
This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Bentleys strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based on their own personal circumstances.
SMSF
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| If you have... | We require... | What you need to do... |
|---|---|---|
| A TERM DEPOSIT that has a maturity date after 30 June 2018. | Documented evidence of having the term deposit in place as at 30 June 2019 | If your term deposit matures PRIOR to us receiving your work: Please provide us with your reinvestment or redemption notice. If your term deposit is due to mature AFTER you have given us your work: Please contact your bank and request a statement showing that the term deposit was in place as at 30 June 2019 |
| Taken a PENSION from your SMSF | Check to ensure that you have taken your minimum pension as advised to you in previous correspondence. Check whether you have made any additional contributions to your SMSF prior to 31 May 2019 | Review your bank statements to confirm how much you have drawn as a Pension payment. If you have contributed additional money to your SMSF and haven’t advised us, please do so now. We need to ensure your minimum pension has been calculated on the total balance of your fund (including contributions made during the year). |
| Planned to make a CONTRIBUTION to superannuation this year. | The contribution must be in your SMSF bank account prior to close of business 30 June 2019 | Ensure that your contribution is within the relevant limits. If you are unsure about what these are, please contact our office prior to making the contribution. |
| DIRECT SHAREHOLDINGS | Confirmation of shareholdings held within your SMSF as at CLOSE OF TRADE 30 June 2019 (Please note: confirmations must contain the Registry details on the document. Reports printed from your own bookkeeping file eg. MYOB is not sufficient for Audit purposes). | If you have a Stockbroker: Request a copy of your Investment Summary Report. This report should detail your fund’s CHESS sponsored holdings and their market value as at close of trade 30 June 2019. If you have an online broking account eg. Commsec, nabtrade, E-trade: Log on to your account and download a copy of your Investment Summary Report. This report should detail your fund’s CHESS sponsored holdings and their market value as at close of trade 30 June 2019. If your shares are issuer sponsored and held through a Registry: Log on to your relevant Registry and print a Holding Summary (see below for instructions) If you have previously registered, print a Holding Summary. If you have NOT registered, go to the Investor Centre, and follow the steps to register. NOW is the time to arrange your Member login and review your Portfolio. Once registered, at 30 June print a Holding Summary. The following shows the path to the different organisations: Computershare - https://www.computershare.com/au Click the ‘Log in’ button and select “Investor Centre” – this will open a new window. Select “Existing User” and you will be directed to a new page to enter your log-in details. Link Market Services - www.linkmarketservices.com.au Click on “Investor Login” section – this will open a new window. Enter your log-in details. Boardroom Limited - www.boardroomlimited.com.au Click the Login button in the “InvestorServe” box (bottom left hand corner of the screen) – this will open a new window. Enter your log-in details. |
This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Bentleys strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based on their own personal circumstances.
Superannuation
Download this checklist here
| If you... | You may want to... | So you can... | |
|---|---|---|---|
| Make tax deductible super contributions | Are under 75 years of age and want to increase your superannuation balance | Invest in super and claim your contribution as a tax deduction (but beware of limits and other conditions that may apply) | Use the deduction to offset taxable income and save on tax |
| Get a super top up from the Government | Earn less than $51,813, of which at least 10% is from employment or business and have less than $1.6M in super and have not exceeded the non-concessional cap | Make a personal after-tax super contribution for you or your children | Qualify for a government co-contribution of up to $500 Increase your retirement savings |
| Boost your partners super and reduce your tax | Have a spouse who earns less than $37,000 per annum | Make an after-tax super contribution on their behalf | Receive an offset of up to $540 Increase your partners retirement savings |
| Use super to manage Capital Gains Tax | Manage a capital gain on the sale of an asset | Invest some of the sale proceeds in super and claim a tax deduction for the contribution | Use the deduction to offset your taxable gain and save on tax Increase your retirement savings |
| Minimise your SMSF Admin costs | Have a Self Managed Super Fund? | Check our end of year SMSF Checklist | Ensure your fund remains complying by paying minimum pensions, downloading asset confirmation documents etc. |
This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Bentleys strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based on their own personal circumstances.
Need help?
If you need assistance with any aspect of your end of year planning, contact the Bentleys team. Find your local office.
General Advice Warning: This article has been prepared for the purpose of providing general information, without taking into account any particular investor’s individual objectives, financial situation or needs. You should therefore, before making any personal decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to your own objectives, financial situation and needs. We would be only too pleased to help if we can.
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Bentleys Network
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