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SME - Booklet 2 min read MINIMISE YOUR TAX

6 WAYS13245Deferring IncomePre-paying expensesInstant asset write-offSuperannuation contributionsBusiness restructuring6Reviewing debtorsMINIMISE YOUR TAX

You may consider deferring income until thefollowing financial year by way of deferring invoices.This is particularly valuable if you will be paying tax ata lower rate next year. Perhaps you expect yourincome to drop, taking you into a lower tax bracket. When you defer income you also defer paying the tax.So, if you don’t send any invoices until July, thecorresponding income will occur in 2024-25, not2023-24. Deferring incomeDeferring incomemeans you deferpaying the tax untilthe next FY

Instant asset write-offThe Government is providing $290 million in cashflow support by extending the $20,000 instant assetwrite-off. Small businesses with annual turnover ofless than $10 million will be able to immediatelydeduct eligible assets costing less than $20,000 until 30 June 2025.This allows you todepreciate the costof the asset

Pre-paying expensesIf you do have some spare cash right now thenprepaying some expenses for the next financial yearbefore the 30th of June will allow you to claim the taxdeduction in the current tax year.Some really easy expenses to consider are rent,subscriptions, insurance or accounting fees. If paidby the 30th of June, up to 12 months of prepaidexpenses can be deducted from the current tax year.Pre-paying expensesallows you to claimthe tax deduction inthis FY

SuperannuationcontributionsIf you're in a position to make additional or largercontributions to your super you can claim anadditional expense and save yourself some tax.Remember that the payments do need to bereceived by the super fund prior to the 30th ofJune for the super contribution to be deductiblein the current tax year.Super contributionsallow you to claimadditional expensesand save tax

Business restructuringThe different business structures each pay differenttax rates. Therefore, if your business is growing andyou’re currently a partnership or sole-trader, then itmay help your business to move to a companystructure for tax benefits. It’s important to talk to your accountant if you’reconsidering changing your business structure.Different businessesstructures attractdifferent tax benefits

Reviewing debtorsIf your business has outstanding debtors then nowmay be a good time to review your debtors anddetermine if there are any that should be written off.Doing this before 30 June 2024 will allow you toclaim a bad debt deduction.Writing off bad debtsallows you to claim atax deduction

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