Many small business owners approach tax time with a certain amount of trepidation. They may think that they are prepared, but the reality is that many of them are not and they may be leaving a significant amount of money on the table as a consequence. It is important to have a plan in place to try and mitigate your tax liability as much as possible, so you can take advantage of the benefits and deductions that are available. Have you missed any of these nuggets?
Taking Advantage of "Super"
One of the biggest tax incentives in Australia is without doubt superannuation. If you're self-employed, you may often overlook your allowances and may not get the type of relief that you qualify for. Try to make sure that you put the maximum allowable sum into your "super" according to the strict deadlines and especially just before the end of the year. Always take into account your tax bracket and any liabilities deductible from within your fund, to see what your real benefits are.
Strategic Bill Paying
If you want to reduce your liability in this period and are not too concerned about your cash flow at the same time, you may be able to pay some particularly large bills just before the deadline. Of course, it would be nice to receive the associated income soon after the end of the year, so you could smooth out your liabilities more effectively.
Out-Of-Pocket Medical Bills
Don't forget to add any medical expenses that you are eligible for, where your out-of-pocket payments were above the threshold. So long as you have the appropriate documentation, then you will be able to get a good rebate against your outstanding tax.
Health Insurance
Still, on health matters, remember that you need to have private health insurance if you're earning more than a certain level. If you don't have this insurance yet, then you should introduce it as soon as possible, to help avoid paying that surcharge.
Advanced Training
The ATO allows you to claim the cost of any training course when you get the bill, rather than when you actually take part in the education. So, if you're thinking about some significant tuition at some stage in the following year, write the cheque today, and you can reduce your tax bill accordingly.
Within the Rules
As you can see, you can be creative when you get around to tax time, but that does not mean that you should try and pull a fast one. Always work within the rules as you try to take full advantage of your eligibility but check with your accountant if you're unsure.
For more information, contact your local accountants.
Share26 September 2018
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