With the year end coming up fast you have an opportunity to maximise tax by taking these simple steps:-
YEAR END TAX CHECKLIST 2019
We are coming to the end of this financial year and this is an opportune time to think of money matters. You do not need to worry anymore. We have put together a list that would help you end the year on a high with minimal fuss. Let’s jump right into it!
- Review your debtors and any bad debts should be written off prior to balance date.
- Retain documentation to support the debts that are not recoverable.
- Use the “Reasonable Man Test- Would a prudent, reasonable man consider this debt as a bad debt?”
- Remember to make your GST adjustment.
- Review your stock prices and write them down to realisable value if it is lower than the cost.
- Perform a stock take for accurate stock figures. The more accurate your accounts, the clearer the picture it paints.
- Write off Obsolete Stock and physically dispose of them.
- If your turnover is less than $1.3 million and you can demonstrate that the closing stock can reasonably be estimated to be less than $10,000 you can use the opening stock.
- EMPLOYMENT ACCRUALS:
- Amounts owing to employees at balance date for bonuses, holiday pay or long service leave can only be deducted in the current year if the amount is paid within 63 days of balance date (2 June).
- Certain prepayments (e.g. stationery, rent, insurance, advertising, service contracts and subscriptions) can be claimed as a tax deduction in the current income year so long as they have not been treated as a prepayment in the balance sheet.
- Keep documentation to establish when payment was made, what it was for and for what period, so deductibility can be determined.
- Review your depreciation schedule and identify assets that has been scrapped, stolen or no longer used by the business. These can be written off.
- Ensure repairs have not been capitalised as an asset.
- If you have an imminent asset sale that will result in deprecation recovery, consider deferring until after balance date.
- For the property investors, consider getting your chattels valued by the professionals if you have purchased a property in the 2018/2019 year to maximise your depreciation.
- If you are purchasing an asset, purchasing it on the 31 March (rather than 1st April) would give you a full month’s depreciation.
- REPAIRS AND MAINTENANCE:
- Carry out Repairs and maintenance work before balance date.
- If you have a one-year warranty that comes with your asset purchase, make sure the cost of the warranty can be separately quantified and expensed.
- VEHICLE EXPENSES:
- Is your logbook still current? A logbook needs to be renewed every 3 years unless the usage has changed significantly.
There you have it! Now you can use all the tools at your disposal to ace the final lap and end the year on a financial high with a big beaming smile on your face!
Have a great month ahead and an even better year!