A recent survey of 507 businesses by the Commonwealth Bank in May found that the majority of small to medium businesses fail to take advantage of the available strategies in tax minimisation. Read more here.
If you missed out on minimising your tax obligations this end of financial year (EOFY), now is a great time to get organised and educated on how to come out on top next time.
It doesn’t take a tax expert to save on some tax dollars. Just some simple rules, forward planning and a little organisation. In this week’s blog post, we offer up some handy hints on how to ensure your real estate agency is tax savvy when EOFY hits once again.
It’s possible to offset profits by accumulating items such as stationery and other expendables. While this may sound like a trivial feat, that old saying “it all adds up” comes to mind. Ink and toner cartridges are quite expensive, so even a handful of them could create some substantial deductions.
In the lead-up to June 30, it will be worth your while assessing your current debtors and deciding which funds you’re certain you won’t be able to recoup. Writing off bad debt is a necessary evil, but in turn, reduces your agency’s revenue, which is obviously good for you at tax time.
It’s vital to keep any receipts you think you may be tax deductible come tax time. Don’t overlook the small items either, because they all add up. If you’re unsure whether an expense is tax deductible, keep it anyway – your tax agent will be able to guide you on this. The downside to not keeping receipts is that there’s a distinct lack of evidence of expenditure – and without a physical reminder, you’ll most likely forget about certain expenses you’re entitled to claim. Anything you do claim will decrease your tax liability, which is in your favour, so keep a good record of everything.
To gain a tax deduction for your staff’s superannuation guarantee payments sooner rather than later, it’s possible to pay them out in June (after the last pay run), instead of July when they’re due. This way, your agency will receive the deduction this financial year, rather than waiting a full twelve months.
On a normal day, this would sound understandably absurd. Today, however, we’re talking about getting ready for tax time. In order to keep your tax liability to a minimum, your income must be kept to a realistic minimum. If you can, delay the distribution of invoices until July 1, so they don’t affect the current financial year. Of course, if your agency needs the cash flow imminently, then this need should probably prevail. Perhaps in this scenario you could look into an advance commission arrangement instead.
Doing it right
It might be tempting to tackle your own tax come EOFY, but by doing this, there’s always a chance you may miss something – or end up paying more tax than you need to. By trusting a registered tax agent you can be confident the t’s will be crossed and the i’s dotted.
At the end of the day, a tax professional will know exactly how your tax liability can be minimised, so that you walk away with the best outcome possible for your agency’s situation. Being able to claim your appointment fee is the icing on the cake!
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