Take advantage of Tax Saving before the year ends!
Tax planning should be done on a regular basis throughout the year, but if you have been busy see us today to get your 2023 Tax Savings in order! Book online now to have a Tax Planning meeting and save tax this year!
Imagine what you could do with tax saved?
- Reduce your home loan
- Top up your super
- Have a holiday
- Deposit for an Investment Property
- Upgrade your Car
- Invest in new passive income assets
IS YOUR BUSINESS A “SMALL BUSINESS ENTITY”?
Small businesses can access a range of tax concessions from the ATO. To qualify as a “Small Business Entity”, the business must have an aggregated turnover (your annual turnover plus the annual turnover of any business connected/affiliated with you) of less than $10 million and be operating a business for all or part of the 2023 year.
Your business structure could be eligible with the reduced company tax rate if it’s a base rate entity to just 25% for the year ended 30 June 2023.
If you use a Trust structure, one strategy is to allocate profits to a “Bucket Company” and cap your tax at 25% for the 2023 year. Note that this company must have business operations to qualify for the reduced company tax rate, but if not it’s still only 30%, which is less than most people that earn more than $45,000 a year. Bucket company can be a great way to save tax when used correctly and can even get used as another vehicle to invest and or make more money.
It’s important to make this decision before thee years end so you can make the correct Trust Distributions meeting before the years’ end.
INSTANT DEDUCTION FOR NEW ASSETS
If your business is a Small Business Entity, the following tax concessions apply in 2023FY.
You should buy these assets before 30 June 2023 to take advantage of this. As always buying things for the sake of saving tax is not always the best process to follow, but if you need a new asset anyway, now could be a great time to take advantage of the instant write off.
These assets must be first held and first used, or installed ready for use for a taxable purpose, between 7.30pm (AEDT) on 6 October 2020 until 30 June 2023.
For small and medium-sized businesses (aggregated turnover of less than $50 million), temporary full expensing also applies to the business portion of eligible second-hand depreciating assets.
Businesses can also apply temporary full expensing to the business portion of the cost of improvements made to eligible depreciating assets. This applies even if those assets were acquired before 7.30pm (AEDT) on 6 October 2020.
Under temporary full expensing, small businesses also deduct the balance of their small business pool at the end of the income years ending between 6 October 2020 and 30 June 2023.
Small businesses will need to apply the simplified depreciation rules to claim temporary full expensing. From 7.30pm (AEST) 12 May 2015 to 30 June 2023, the ‘lock out’ rules are suspended to allow small businesses that choose to stop using the simplified depreciation rules to take advantage of temporary full expensing and the instant asset write-off.
This article is provided as general information only and does not consider your client’s specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability require a detailed analysis of a client’s specific circumstances. © Business Edge Advisors