If you are planning to pay bonuses or director’s fees make sure that these are declared before June 30. They don’t have to be paid before June 30 to take the tax deduction but the company does need to be legally committed.
This is normally achieved by a director’s resolution approving the bonus or fee. Do this and the company takes the deduction into this year.
The recipient does not need to declare it on their personal return until the year of actual receipt.
If you are a Small Business Entity for tax purposes then you can take advantage of the prepayment rules. Expense prepayments for up to 13 months’ service, made in June, will qualify for deduction into the current year.
Make sure that you make your superannuation payments before June 30. The funds need to be receipted by the super fund to be eligible for current-year deduction.
Where you have SGC payments for staff for the June quarter, if you can pay these before June 30 you will take a current-year tax deduction.
If you operate through a trust structure make sure you determine the appointment of income to beneficiaries before June 30.
This is an area that is under the Australian Tax Office spotlight at the moment.
We’ll cover some more tax planning tips in the coming weeks, but start work on these ones. After all, there’s no point paying more tax than you have to.
Greg Hayes is a director of Hayes Knight and specialises in taxation and business planning advice.
