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 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.
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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The Bentleys Team
Tony Sacre
Chief Executive Officer
Bentleys Network