Tax Tips End of Financial Year 2020

Apr, 2020

Tax Tips EOFY for Small Business

Perform end of year stock take – write off any obsolete stock/slow stock. Small Business Entity (SBE) does not have to account for stock if less then $5,000 movement. Recommendation is still to do.
Pay superannuation for all employees and directors prior to 30th June 2020. Ensure it is a few days before as it has to be received by your Super Fund before 30th June NOT when you transfer.
Ensure payroll reconciliation is completed prior to submitting your Single Touch Payroll (STP) Report.
Pay all suppliers by 30th June – if Small Business Entity on Cash Basis for GST and Tax.
Defer invoicing until after 30th June – Small Business Entity on Accrual Basis for GST and Tax.
Write off any bad debts (if all measures have been taken to recover bad debts).
Ensure Provisions for Employee Entitlements are accrued and recorded for Annual Leave and Long Service Leave.
Review your Fixed Asset Register – write off obsolete items.
Write off any bad debts (if all measures have been taken to recover bad debts).

Covid19 Stimulus Changes impacts pre 30th June 2020

Instant Asset Write Off. Purchase depreciable assets $30,000 write off limit from 1/7/2019-12/3/2020.

This has been increased to $150,000 due to Covid19 Stimulus Package from 12/3/2020. Note, luxury car limit still applies for $57,581 for 2020 Financial Year.

This limit at current will revert back to $1,000 for write off from 1/7/2020. Recommendation do not put off any purchase of asset for your business if it is required. Ensure your business can afford to.

Accelerated Depreciation – Brand New Assets Only (for assets over $150,000,not eligible for immediate write off from 12th March 2020 – 30th June 2021). 57.5% for Small Business Entity (SBE) and 50% for Non SBE. Specific Exclusions apply.
Covid19 Cashflow Boosts – PAYG Withholding Quarterly/Monthly. Exempt from Tax. Boosts issued March 2020, June 2020, Sept 2020.
Jobkeeper Payments Received – Assessable Income.

Individual Tax Tips

Ensure new log book completed or record annual odometer reading. Reminder, valid for 5 years if done for 12 weeks and no substantial change in annual kms travelled. Ensure descriptions recorded correctly not just “Business” or “Private”.

Have you embraced digital technology for completing your log book? Ask us how!

Diary for home office usage 1/7/2019 – 28/2/2020 – internet/phone usage for 4 weeks for period.
Diary for home office usage hours 1/7/2019 – 28/2/2020 power, heating, office furniture for 52 cents per hour claim.

OR

claim actual expenses based upon receipts including light/heating/power for set area required m2 for home office and total house/garage in m2.

Diary for home office – Covid19 working from home. (No specific set area required. 80 cents per hour 1/3/2020 – 30/6/2020 replaces the 52 cents per hour).
Use ATO App for collating and recording receipts for expenses for ease of transfer to your accountant.

https://www.ato.gov.au/General/Online-services/ATO-app/myDeductions/

If low income earner or part time worker, ensure you pay up to $1,000 into your supoerannuation prior to 30th June to receive government co-contribution of up to $500.