The financial year is almost over. You’ve got nine more days to go shopping for tax deductions. After that, the decisions you’ve made for the past 12 months are pretty much locked in – there’ll be very little further you can do to optimise the tax position of your business. Which is why it’s so important to know – in advance – how you’re tracking financially.
If you know your business should be purchasing a new car, computers, or office furniture, in the not-so-distance future, then you’ve got to make an important decision about whether that expense should fall in the current financial year, or be delayed until next. To throw another variable into the equation, you also need to evaluate whether the sticker price you purchase an asset for today will still be available after 30 June – there are plenty of companies offering special ‘End of Financial Year’ sales, and you may not be able to get the same deal if you wait until after 1st July.
Tax Deductions for Motor Vehicles
Take, for example, motor vehicles. Manufacturers like Holden, Toyota, Ford, and Mitsubishi, are offering some pretty hot deals.
If your business needs a great little economical city car, you can pick up a 2013-plated Fiat for $13,000, or a 3-door Hyundai i20 for only $14,990. Toyota are offering 1% finance on their Yaris, and Nissan is matching that for the Pulsar.
If you need a work horse, Mitsubishi will soon be introducing a new Triton, so you may want to investigate whether it’s worth snapping up a bargain on the current model (it’s resale value is likely to be impacted by the release of the new model, and it’s not as sophisticated as many of the new breed of utes, but the sharp pricing could be pretty hard to resist and may be more important to your cashflow and productivity than buying the latest, greatest, in 3 months from now).
Or do you want a car that’s a reward for all your hard work to date? BMW is offering to reduce the price by an amount equal to the GST; Audi are throwing in sweeteners like 4 years’ free servicing and road side assistance; Lexus is doing 1.8% comparison rate finance on several models; Infiniti is doing 0% finance on the QX70 SUV if you’re prepared to chip in a 10% deposit; and the list goes on. You may not get such a good deal on a prestige car for another 12 months.
Tax Deductions for Superannuation Contributions
But it’s not all just about buying more ‘stuff’. If business is good, you should certainly be thinking about your own personal nest egg as well. The Government continues to give some substantial tax incentives for you to put more money away in superannuation, but there’s a cap for each financial year, and if you hesitate on this decision, you’ll never get the opportunity back – payments received by a super fund even 1 day after the end of the financial year can not be included in a given year’s calculations.
As a minimum, employers are REQUIRED to pay the legislated super for their employees (9.25% for the financial year ending 30 June 2014) by 28th July at the absolute latest (it must arrive in the superannuation fund’s account by that date). However, for the business to claim superannuation payments as a deduction in FY2013-14, the payment must hit the super fund by 30 June 2014. Similarly, if you choose to withdraw extra funds from your business and make a personal superannuation contribution at concessional tax rates, this must occur by 30th June.
If you’re of the mindset that you can send all your bookkeeping data to your accountant and leave your tax-related decisions until after the end of the financial year, think again. Understanding your financial position throughout the year, and using that knowledge to guide your decision making, can have a significant impact on your overall profitability, cashflow, wealth creation, and tax obligations.
You’ve only got 9 days left… You might want to make a quick phone call to your bookkeeper, right about now!
