With June 30 fast approaching we draw your attention to tax planning opportunities for financial year 2019/20 before it is too late.This financial year is different to prior financial years because of
- extra Covid 19 stimulus measures
- deferral of the Federal Budget from May 2020 to 6 October 2020. Incentives that have been renewed in previous years Budgets in May for 1 July will most likely end on 30 June 2020 as they will not be renewed in time.
The most important tax planning considerations are:
- Accelerated Depreciation The threshold for the immediate write off of small business assets was raised from $30,000 per asset to > $150,000 per asset on 12 March 2020. This threshold has since been extended to 31 December 2020.
to depreciation of cars.
rates (57.5% for such assets bought between 12 March 2020 and 30 June 2021).
- Superannuation Contributions The tax deductible superannuation contribution limit or cap is $25,000 per year. Superannuation contributions are an effective tax saving strategy as the rate of tax on superannuation is relatively cheap.
contribution in 2018/19.
by 30 June 2020.
- Home Office Expenses – New. The Tax Office are expecting extra claims for home office expenses in 2019/20 due to Work from Home (WFH) protocols during Covid 19.
records to confirm your claim.
- Capital Gains Tax (CGT) Planning. CGT pertains to profits/losses on the disposal of investment assets. CGT crystallises at the date a contract is signed (rather than settlement date). We believe that 2019/20 CGT planning includes:
- realising CGT losses prior to 30 June 2020 to offset other gains made earlier in the 2019/20 financial year (if applicable).
- deferring the CGT on a transaction by signing a contract in July 2020 rather than June 2020.
- checking for eligibility of CGT small business concessions prior to entering into a CGT business transaction.
Other Tax Planning Tips for 2019/20
- Can income for June 2020 be deferred to July 2020?
- Can expenses for July 2020 be brought forward to June 2020?
- Do you have any obsolete stock to write off before 30 June 2020?
- Do you have any doubtful/bad debts currently to credit in 2019/20?
- Do you have a Division 7A loan to manage prior to 30 June 2020?
- Do you need help/a review of your business structure – setting up a company; discussing Trust beneficiaries?
Please contact us at firstname.lastname@example.org to arrange a Tax Planning appointment or Zoom phone meeting in the coming weeks.