2020 EOFY tax planning checklist

The impacts of the global pandemic have disrupted businesses and households globally. However, while a lot has changed over recent months, 30 June remains the deadline for end-of-financial-year preparations.

Further to our earlier article providing tax tips for businesses as we approach year-end, the below checklists for individuals and businesses offer additional practical help to get your EOFY arrangements in order.

As always, the team at Bentleys are here to help. Contact us today.

Quick links to checklists:

Business

Download this checklist here

 If you……. You may want toSo you can
Count your stock
Have a business that holds stockEnsure you do a stocktake on 30 June and keep a record of the market, cost and replacement valuesUse the value which gives you the best tax outcome possibly saving you tax, or deferring paying tax
Write off obsolete stockHave a business that holds stock Write down or dump obsolete or damaged stock prior to 30 JuneSave paying tax on stock you don’t actually have!
Pay staff superEmploy staff Pay their April – June super before 30 June 2020. The funds must reach their super accounts before 30 June 2020Bring forward your tax deduction to 2020
Single Touch Payroll (STP)Employ staffPerform the End of year finalisation of your payroll in your STP software. Advise employees their income details are on myGovEnsure you are not penalised for late lodgement

Advise employees that they can complete their tax returns
Taxable Payments Annual ReportOperate 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-offOperate 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 estimatesHave 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 endsTake 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 expensesOperate a “Small Business” (turnover less than $10M)Prepay expenses for up to 12 monthsBring 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 weeksEnsure 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 assetsHave 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 soldClaim a tax deduction for the balance of the asset value this year
Write off bad debtsHave debtors who have not paid their accounts, have been chased and are not likely to payWrite off the debt in your books prior to 30 June 2020Claim 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 lossRealised a capital gain from an investmentTrigger 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 yearDefer 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 fundMake 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 policySave 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 JuneMaximise 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 methodEnsure 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 ReportOwn a rental property Contact a quantity surveyor and obtain a depreciation report if you don’t already have oneClaim 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 donationMake the donation before 30 JuneBring 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.

Need help?

If you need assistance with any aspect of your end of year planning, contact the Bentleys team. Find your local office.

We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.

We will continue to update our COVID-19 resource hub with important developments, so please return soon.

 

COVID-19: A summary of Australia's tax measures

The governments of Australian states and territories have also released independent stimulus packages. For an overview of all Australian measures, click here

 

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