Loewy Consulting Partners Year End Tax Tips

As we approach 30 June 2021 we thought we would take the time to remind clients of some year end tax planning tips that could be of some benefit to you.

Superannuation

- Make contributions by 30/6/21 in order to be able to claim a tax deduction in 2021. Bear in mind funds could take up to 10 days to clear form the Super Stream system so allow plenty of time.

- Consider topping up contributions to the maximum deductible amount of $25,000. These can be made as personal contributions so a salary sacrifice may not be required. For those with a super balance of under $500k and unused cap space from prior years you may be able to make additional contributions.

- Deductible cap increases to $27,500 from 1/7/21 for those wishing to maximise their cap with salary sacrifice arrangements.

- Consider non-concessional contributions to accelerate your super balance. Note for those aged 65-67 the bring forward provisions are now in play.

- Ensure pensions are drawn before 30/6/21.

- SGC rate increases to 10% from 1/7/21 so you will need to make payroll amendments for July pay runs.

- SMSF’s have now been extended from 4 members to 6 members if you have additional family members you wish to add to your SMSF.

Business Asset Purchases

- The instant asset write off allows the instant write off of asset purchases as long as they are installed and ready for use by 30/6/21 if you want to claim in the current tax year. Bear in mind motor vehicles are subject to the depreciation cost limit of $59,136.

Company Tax Rate & Tax Losses

- Tax rates for companies with turnover of under $50m is 26% but drops to 25% for 2022. That may impact decisions on the timing of transactions or dividend payments.

- Be aware of the ability to carry current year tax losses back to apply against prior year profits in the event you have a loss in 2021.

Single Touch Payroll

- Employers with closely held employee’s exemption expires on 1 July 2021 so all employers need to be STP compliant from 1 July 2021.

Expense Issues

- Consider writing off and scrapping old or obsolete stock.

- Consider the write off bad debts. This needs to be cleared from your debtors ledger to be effective.

- Consider prepayments where turnover is under $10m.

- Review asset registers for any scrapped items.

The above is a very brief summary of planning tips and before implementing any strategy we recommend you contact us to seek advice specific to your position.

Important: Clients should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.