1. Overseas investments and currencies
For those entrepreneurs who deal on a global scale, and let’s face it with the power of the internet, it is far easier these days to do business internationally than ever before. Many will be dealing in different currencies and adding overseas investments to their portfolio. If you deal in currency for hedging and other purposes, or have put money into overseas investments, then now is the time to set out and declare all your financial interests. The ATO do have the resources and the time at their fingertips to track down any undeclared offshore investments and the consequences of not disclosing money, are extremely severe.
2. Company bonuses and bad debts
Any bonuses to executives or employees can be brought forward and written down but they have to be minuted and confirmed by 30th June, the same goes for bad debts and you need to document debts written off along with evidence that you have chased them up.
3. Superannuation
If June 30th falls on a Sunday then you need to start booking some dates in your calendar, because first of all if you want to add more to your superannuation accounts you need to do this before that date. The ATO is very strict on anyone seen making an excess contribution, so get any additional funds in before 30th June and make sure it does not go over the $25,000 limit. You also need to be cautious if you’re paying yourself a pension from self-managed superannuation funds. Check with your tax accountant that you are paying yourself the minimum (if you underpay by one twelfth you will probably be alright and not subject to an extra charge fee but your tax agent will need to advise you on this).
4. Shareholder payments
Payments or loans you make to shareholders or associates could be taxed as unfranked dividends under the Division 7A laws. You have to ensure that these loans are dealt with by the EOFY and a minimum amount of payment from the shareholder has to be made. Loan balance at 30th June have the potential to be treated as a dividend so talk to your tax accountant and ensure the Division 7A laws are followed to the letter.
5. Pre-pay your expenses and maximise your deductions
Check all the expenses you pay out and try to prepay as much as you can so you can claim these as deductible items; for example annual membership or subscription fees, interest rates on loans and so on. Review the depreciation on assets owned and get this down as a tax deduction.
6. Finalise all trust documentations and payments
If you are running your business as a trust then make sure you get all your trust distribution plans completed before 30th June including any payments or allowances made to trustees and don’t leave it till the last minute.
7. Mandatory reporting for building and construction entrepreneurs
Finally, this tip relates to those in the building and construction sector because last year a mandatory reporting of every single payment made to contractors was introduced. Companies now have to report these to the ATO who will be looking at these records and documentation so ensure if this applies to your industry sector that you have them all sorted and ready to file.
The Income Tax Professionals in Queensland is well-equipped to manage all your business taxation needs with a professionally trained team of tax consultants and agents, drawing from an organisation that has been in business for more than 35 years. You can discuss your tax return and tax related affairs with ITP throughout the year, without charge. Click here for more information.
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