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Have You Done All You Can Before June 30?

Article By Adam Hurwood | | Accounting & Tax

June 30 is approaching fast. While we are all looking forward to celebrating the new financial year, now is the time to implement tax planning strategies for 2014 and design your business plan for 2015.

100% Immediate asset write-off decreased

The government has proposed the reduction of the immediate asset write-off threshold from $6,500 back to $1,000 from 1 January 2014. This means purchasing depreciable assets leading up to 30 June 2014 for tax minimisation purposes may not provide your business the tax savings you anticipate.

Timing of deductions: Earlier is not always better

Personal and business deductions are deductible when they are incurred. A popular “rule of thumb” is to incur deductions as soon as possible as a tax benefit derived this financial year is more valuable than claiming it next financial year, but this is not always the case. What if your taxable income is going to be significantly higher next year or there are significant changes to your business or to legislation in 2015? The tax saving from a deduction may be considerably different from one year to the next.

With the Federal Budget’s proposed 2% Temporary Budget Repair Levy effective from 1 July 2014 for individual taxpayers earning over $180,000, even if your personal taxable income does not change, your income tax liability will still increase. What will this mean for you?

By reviewing your 2014 financial results to date and considering the 2015 financial year outlook, you can make decisions on when a tax deduction incurred will be of more benefit.

We have provided further information on deductions for individual taxpayers such as super contributions and prepayment of investment interest in our companion article “Top 4 Tips to Prepare You for EOFY“.

Looking to the future: How can I get the best from my business in 2015?

Did the 2014 financial year turn out as you had hoped for your business? Is there anything you can do to make 2015 a success? June is always the perfect time to review your year to date financial results, evaluate your business performance and plan your goals towards a successful 2015 financial year. By understanding your business and the factors that influence it, you can make positive decisions on how to improve performance.

Do you know –

  • How many active customers you have?
  • What your average income per sale is?
  • What are the key business drivers that influence your profit?
  • Can you afford to invest in capital assets or additional stock?

By working on as little as one or two things within your business, you could significantly improve your net profit. In working with our clients, we see business owners that set business goals and actively monitor progress and achievement of these goals are regularly outperforming their competition. If you are interested in learning more, please contact your Altitude Accountant today.