Tax Strategy 5: Save tax by bringing forward your deductions and expenses

Bringing forward deductions and utilising them before 30 June 2017 will reduce your tax this year. These may include:

  • Ensuring your super contributions are paid before 30 June 2017.
  • Writing off bad debts.
  • Immediately deducting assets costing less than $20,000 (if your business turns over less than $10 million per year).
  • Reviewing your depreciation schedule to be sure there are no items that could be removed, no longer exist or are no longer in use. The book value of these obsolete capital items can be written off.
  • Meeting bonus and commission obligations (by passing a resolution to approve the payment, commit to paying any directors fees that may be accrued.)

You are able to claim a full deduction in the year of payment where the expense covers a period of no more than 12 months. These expenses might include:

  • Interest prepaid on a deductible loan e.g: business loan, motor vehicle loan, rental property loan or share portfolio loan
  • Income protection insurance
  • Rent on business premises or equipment
  • Lease payments on office equipment
  • Maintenance and repairs
  • Membership subscriptions to trade or professional bodies
  • Business trips even if taken after 1 July 2017
  • Training courses that run after 1 July 2017

Sasi’s Tip 1: Some banks offer attractive 12 month fixed interest rates around May/June period to help investors/business owners take advantage of the interest prepayment tax deduction. Why not test different lenders to make sure you’re getting the best financing deal?

Sasi’s Tip 2: See my strategy note about $20,000 asset immediate tax deduction. If it suits your business strategy, combine it with your strategy to pay 12 months interest in advance for the asset’s loan finance. 

Our trusted network of service providers includes bank lending managers who can look after your finance requirements. We’d be happy to introduce you.

The information provided above is general in nature and does not constitute financial advice.

Find out more on this topic and get financial strategy advice that’s right for you.

Call (03) 9021 6662 and book your strategy session today.

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