1. Make sure your vehicle logbooks are updated so you’re getting the most accurate amounts for your expenses.

2. Top up your superannuation each year – you can put in up to $27,000 in deductible super contributions every year.

3. Pre pay some expenses – such as rent, subscriptions and insurance you have to any professional corporation. In the current tax year, you can deduct up to 12 months of expenses for the upcoming year.

4. Take advantage of all the tax rebates applicable to you – medical, educational, vehicle, industry related deductions.

5. Consult your accountant for short and long term tax planning – short term applies to what you can undertake before June 30th to minimise your tax in the financial year. Long term looks at how you can implement you can make use of your business structure to reduce tax as well as the investments you can make to help with this.

Simple depreciation

Assets that have a limited life expectancy (effective life) and can reasonably be expected to decline in value (depreciate) over the time they are used.

This includes:

– Tools and equipment (for example, electric sanders and saws)
– Computers, laptops and tablets
– Office furniture (freestanding)
– Office equipment (for example, coffee machines)
– Motor vehicles (for example, cars, vans and tractors).
– Simplified depreciation rules include:
– An instant asset write-off for assets that cost less than the relevant threshold (which is supplemented with the temporary full – Expensing from 7.30pm AEDT on 6 October 2020 to 30 June 2023)
– A general small business pool, which has simplified calculations to work out the depreciation deduction.

Are you eligible?

Yes, if your small business has an aggregated turnover of less than:

$10 million from 1 July 2016 onwards

$2 million for previous income years.


Note – You can only claim deductions for the portions of assets that are used for business/other taxable purposes, not for private use. For example, if you purchase a vehicle for $22,000.00, and you estimate it is used 75% for business and 25% for private purposes, it is immediately written-off but your deduction is $16,500.00.

Resources:
https://www.ato.gov.au/business/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/#Simplifieddepreciationrules