15 more end-of-year tax tips for entrepreneurs

Last week, we brought you 15 great tax tips for the end of the financial year. But we’re not going to stop there.

We’ve assembled our panel of experts to bring you 15 more tips. There isn’t much time left until the end of the year, so you’d better hurry to get your affairs in order.

1. Currencies

There will be plenty of entrepreneurs and business owners who dabble in currency for hedging and other purposes. Tax time means you need to get all your information about those investments and trades in order – and don’t leave anything out. The ATO keeps tabs on these types of investments all the time.

2. Declare money overseas

In a similar fashion, overseas investments are equally important to declare. The ATO has been given an extraordinary amount of money to track down undeclared offshore investments, not to mention the Wickenby investigations. Needless to say, not disclosing this money would be a terrible idea.

If you have any offshore investments, now is the time to declare them. If you haven’t declared some in the past, now is still the time – the ATO is more likely to grant leniency even for investments that haven’t been declared in the past.

3. Write down bonuses

If your business pays out any bonuses to employees or executives, these can be brought forward and written down. The only catch is that they need to be minuted and confirmed by June 30. Just as you need to document chasing any bad debts, bonuses need to be documented as well and completely organised.

4. Beware the superannuation weekend

While most people wanting to contribute more to their superannuation accounts will be savvy enough to add more before June 30, these tax experts say there’s a key point to remember: June 30 is a Sunday.

That means any money added on June 29 or 30 has nearly zero chance of entering a superannuation account before July hits, which means it counts as an excess contribution if it brings the total contribution amount over $25,000.

These experts say anyone wanting to add superannuation funds needs to do so immediately. By Friday, June 28, it may be too late for some.

5. Building reporting

This one may trip up companies for the first time. The government introduced a new regulation last year which mandates companies in the building and construction industry must report every single payment made to a contractor during the year.

This isn’t a huge regulatory burden, as companies need to maintain these records anyway. But this year is the first time businesses in the industry actually have to report them to the ATO.

If you’re in the construction and building industries, better make sure you have these documents all sorted out. The ATO will be watching.

6. Superannuation SMSF pension

For anyone paying themselves a pension from a self-managed superannuation fund, DBA Lawyers director Dan Butler says they need to be paying themselves the minimum amount as set out by the ATO. Anything else could result in extra charges.

“If you don’t, you could be jeopardised for the entire year,” she says. However, there is some leniency.

“The ATO has an administrative practice, so if you underpay than less by 1/12th, then you should be okay. But you need to check with your adviser.”

7. Fringe benefits tax calculation

There are two separate methods for calculating fringe benefits tax for meals and entertainment: the 50/50 method, or the register method.

Using the 50/50 method, businesses calculate FBT by calculating 50% of the total meal entertainment expenditure.

Alternatively, the register method is based on the total amount of expenditure within a 12-week period. Using this method, the taxable value is equal to expenses, multiplied by a “register percentage”.

These experts say businesses need to speak with their tax advisers about which method would be cheaper and most valuable for their business.

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