End of year tax tips for businesses & individuals
All stock should be reviewed during the end of year stock-take and choices made in relation to its value as a tax and commercial asset. Consider the age of the items, likelihood of future sales and their scrap value. Remember to keep and file all relevant documents.
Be prepared to substantiate your claim
Make sure you keep receipts to prove your deduction and show why the expense was incurredto derive assessable income.
If allowed by your lender, this is a strategy to defer the payment of tax. Factors such as anticipated future income, interest rates and cash flow impact should be considered fully beforehand.
Review fixed assets useful life and determine if there are any benefits in scrapping or trading in assets in light of the temporary investment allowance.
Small business CGT concessions
Individuals operating a small business may be eligible for CGT concessions on the sale of business assets. Review your potential concessions this financial year.
Work from home
Taxpayers that work from home may be able to claim a percentage of home related expenses.These expenses must be directly related to the earning of taxable income.
Renovations by previous owner
You may be eligible for a deduction for depreciation on the cost of improvement by a previous owner, provided items are identifiable and itemised in a depreciation schedule.
Review Division 7A private loans
A private loan older than 6 years faces the risk of becoming statuted barred (unenforceable). This means the ATO may use a discretion and treat it as an unfranked dividend unless remedial action is taken.