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EOFY Tax Planning – What to do before 30 June 2021

EOFY Tax Planning 2021

How to get ready for EOFY (2021)

Key Deadlines

June 5 – The final lodgements for 2019-2020 Company Tax Returns are due.  This is the deadline for accountancy agencies to submit their clients’ returns.

1 May – 30 June – Annual Taxation Planning.

30 June  – Activities from tax planning to be finalised, including asset purchases, super contributions & other activities.

28 July – Second claimable Jobmaker hiring credit

Claimable Tax Deductions and Benefits

End of Year Tax Planning

A good accountant will save you thousands in tax and ensure your business is structured correctly. They will provide data-driven advice and provide best practice solutions based on your objectives and personal/business financial circumstances.

After trading for the year, it is a great time to review the business’ performance and get an understanding of how to optimise your tax position. 

As there will be some good data to review providing your accounts are up to date, it is an ideal time to review some common questions;

  • How much should I pay myself?
  • Is a dividend payment right for me?
  • I have low-income family members, can we utilise them?
  • How should I distribute my business profits?
  • I have made a loss, what are the tax-loss carry-back provisions?
  • What grants are available for my business?
  • I want to make some investments, how do I structure these?
  • Are my personal assets safe?
  • Is my business structured in a way that allows for a sale or part-sale?
  • What can I do to reduce my tax?

These are some of the questions a POP accountant has front-of-mind when attending to the annual planning and can put you in good stead to optimise your position and help you to achieve your objectives.

Instant Asset Write-offs

The Instant Asset Write-off threshold has been increased to up to $150,000 for each asset installed and ready for use between 12 March 2020 and 30 June 2021.  Vehicles are capped at $59,136 each.  

Small businesses should use the simplified depreciation rules to instantly write off assets or pool the value of multiple assets to calculate a combined depreciation rather than separately.

The business portion of assets purchased between 7:30pm 6 October 2020 and 30 June 2022 can be fully expensed for businesses with an aggregated turnover of under $5 billion.

Between these two measures, it’s a great time to upgrade equipment for your business such as company computers, office furniture, cars, phones and more, as you can use these expenses to reduce your business’ tax liability.

There are some great financing arrangements available so get in touch with POP if you need any assistance.

instant asset write off

JobMaker Hiring Credit

Get your records in order so you can claim your JobMaker Hiring Credits for employees hired under the JobMaker scheme.

The second claimable period of 7 January 2021 – 6 April 2021 is due on the 31st of July, with Single Touch Payroll (STP) due on the 28th of July.

The third JobMaker period of 7 April – 6 July 2021 will be claimable from 1 August– 31 October 2021, with STP due on the 28th of October.

Loss Carry-Back

As part of the 2021 Federal Budget, the Temporary Loss Carry-back Measures were extended until 2023.  When lodging tax returns up to 2022-2023 FY, companies with an aggregated turnover of less than $5 billion will be able to carry back tax losses from that current year to offset profits from as far back as the 2018-2019 financial year.

This also applies to any losses incurred during each of the financial years between 2019-2020 and 2022-2023.  Get in touch with our fantastic accountants at POP if you need assistance or advice claiming these offsets.

Wages & Superannuation

If you’re operating in a company or trust structure that is paying wages and super to employees, you can claim certain deductions.

You can claim deductions for wages and super contributions you’ve made for your employees or certain contractors.  To be eligible for deductions, these payments must have been paid before 30 June.

Top up your Super with personal super contributions.  If you’ve set up a salary sacrifice, you’re already reducing your taxable income.  Your super contributions will also be getting taxed at a lower rate of 15%, whilst getting the tax deduction in the company at 26%, or at your personal marginal tax rates depending on where you make the contribution from.

WFH Expenses

If you’ve spent a lot of time working from home during Covid-19, you can claim deductions on the business use portions of equipment, furniture, electricity, phone bills and more.

There are 3 methods you can use to claim these WFH expenses:

  • 80c/hour shortcut method (easy), which is a flat rate method to cover all your expenses.
  • 52c/hour fixed rate method (easy), which covers a flat rate for certain items but also allows the claiming of actual amounts for items such as dedicated work phone plans.
  • Actual cost method (advanced)– where you can claim the actual amounts of eligible work-related items.

Each of these methods have their own benefits and you can choose whichever one will best maximise your tax deductions.

working from home

Legal Plans

Many business owners don’t know that many business services are actually tax-deductible. One such example are legal services, such as the affordable online Legal Advice Plans available through our partner Lawpath. Plans such as this give you access to a lawyer on-demand, 300+ legal and business documents and multiple other features to help you manage your legal obligations as a business owner.

EOFY Business Reviews with POP Business

Get your business on track for 2022 with a POP Business EOFY year review. Some of the services we are offing to get you prepared this EOFY include:

  • EOFY company review – business structure and financial review to make sure you’re allocating your funds efficiently and are operating tax effectively.
  • EOFY tax planning – prepare for the 2022 EOFY with an analysis of your business’ current tax obligations, and the grants, deductions and tax-effective practices you can take next financial year to maximise your cash flows.
  • BAS & GST services – outsource reporting obligations to POP Business who can file your quarterly BAS reports and provide you with the best advice on how to manage your GST obligations.
  • Payroll – optimise your workflow by outsourcing your payroll processes to POP – stop spending hours on your bookkeeping, and get it done by qualified professionals and spend more time focusing on your business.
  • Outstanding tax lodgements – if you have any outstanding lodgements, whether it be tax returns, BAS or otherwise, POP can get these lodged for you quickly so you can make a fresh start in 2022.
  • And more

All of POP Business’ accountancy and advisory services are billed at fixed fees with no hidden costs.  Get in touch today and get your business financials sorted so you can keep building your dream business!

Patrick Sargent

CEO

Patrick Sargent

Patrick Sargent

Patrick Sargent is a Chartered Accountant and registered Tax Agent who is passionate about helping business owners and individuals achieve their goals. He co-founded the cloud and tech-focused accounting firm POP Business back in 2018. Since then, Patrick and his team have won numerous awards and accolades including the 30 Under 30 ‘Tech Innovator of the Year’, and coming in as a finalist in the Australian Accounting Awards 2020.   He has expertise in helping small businesses with a range of accounting services, including tax preparation, financial advisory, accounting and bookkeeping, and personal tax planning, as well as company, trust, and partnership tax returns and more.

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