Doing A Final Tax Return For A Deceased Loved One

Doing A Final Tax Return For A Deceased Loved One

At the worst time of your life, the last thing you want to think about is tax.

However, when a loved one dies, their affairs must be dealt with at some stage. This includes their tax obligations.

You must lodge a date of death tax return if any of the following apply to the deceased person in the income year in which they died:

• they had tax withheld from their income, including from interest or dividends
• their taxable income was above the tax-free threshold
• they lodged tax returns in the income years before their death or had outstanding tax returns.

To deal with a deceased loved one’s affairs, the help of a solicitor is highly recommended. Someone will be granted the role of executor or administrator of the deceased person’s estate (usually stipulated in a will).

From a tax perspective, there are a few things that the executor or administrator has to do.

The Australian Taxation Office (ATO) must be contacted and informed that your loved one has died. When you notify them of the death, they can tell you if the person had any outstanding tax returns for prior income years.

All their financial documents must be compiled, and you must lodge a date of death (or final) tax return. This will only need to be lodged if your loved one had tax withheld from their income or had earned more than the tax-free threshold.

This final tax return differs from a standard tax return as it doesn’t cover the full financial year – it only covers up to the day that the person died. The date of death tax return covers the period from 1 July of the income year in which the person died up to the date of death. All income and tax deductions until that day are inputted into the final tax return. This differs from a trust tax return for the deceased estate, which is for the period after the person dies.

Tax obligations can still occur after that day, such as income earned from investments or the sale of assets that may or may not be subject to capital gains tax.

In these circumstances, the executor or administrator of the estate will need to apply for a separate and new tax file number for the estate. The estate is treated as a separate taxpayer and will pay tax as if it were an adult individual resident taxpayer.

This special treatment of the estate is received for up to three tax returns after the date of death (in fact, it is for two years from the date of death).

This time is very stressful, even without these additional obligations. The support of a tax professional during this process can ease the burden, as this is a role we are accustomed to taking.

Contact us to find out how we can aid you, even if we weren’t the accountants for your loved one. We’re here to help.

It’s Bigger On The Outside – Faking Business Growth To Grow The Small Business

Making your business seem more significant than it actually is can go a long way in helping you secure larger clients.

Appearing larger can help customers feel more secure when dealing with you and possibly give your voice or presence more authority. Exaggerating elements of your business regarding first impressions is easier than you might think, and many of the available strategies are cost-effective.

Put Extra Effort Into Your Website:

Your website is one of the first places potential customers will visit to size you up. The impression that your website makes on them can seriously influence how your company is perceived. A website with a dated design, difficult navigation or poorly written copy can instantly give a negative impression. Poor-quality websites suggest you’re a small, amateur company that doesn’t care about online presence. This can alienate an entire group of potential clients.

Work On Your Social Media Presence:

Developing an active and current social media presence can help a business connect with its customers and assist in making it appear more prominent and experienced. Social media sites increase the amount of information that can be found on a business and are usually far more engaging and cost-effective than traditional forms of advertising.

People generally assume that businesses with a lot of online material have been there for a long time. Businesses with many followers on social media can create a sense of age and experience, enhancing the brand’s image.

Invest In Your Promotional Materials:

Professionally designed business cards with consistent stationery and letterheads will give business credibility. For example, printing the details on cheques and envelopes rather than writing on them by hand are small and cost-effective options that can assist in building professional reliability.

Continuity over different marketing platforms also promotes a sense of brand unity. Using professionally designed images on all company material will demonstrate your reach and stability in the market.

Get A Virtual Office:

For businesses that cannot afford a full-time receptionist, setting up a virtual office can have the same effect at a much cheaper cost. Having a virtual employee answer phone calls and manage customer service from an outside location means eliminating the costs of actual employment while giving the impression that the business is much bigger than it is.

Turning A Vehicle Into A Company Car:

Visiting clients is essential in specific industries, such as businesses within construction or maintenance. Pulling up in a company-branded car can build respect and show professionalism. However, check with an accountant about the tax treatment involved with company cars, if buying a company car is the right move for the business or what records may need to be kept for work-related expenses involving the car.

Assess The Location:

There are many external elements of a location that can affect your business. Look at the traffic in the area and work out how it can support or hinder you, as well as what services are in the area in which you choose to locate. Consider asking other businesses in your desired location for some advice on the best providers for services such as gas, electricity, water, phone and internet. Access for both customers and employees is also a large factor when assessing the location. Consider whether it is easy enough for clients to find and employees to travel to every day. Making your business accessible can allow you to obtain a wider pool of staff.

Remember your legal and environmental obligations when choosing a place to set up your business, and check with the local council for any planning and building restrictions if necessary. For example, consider how possible noise produced by your business would affect the local community. Before making any big decisions, consider seeking further legal or professional advice. This gives the added benefit of your brand getting noticed on the street.

Spreading The Word:

To get the attention of more prominent potential clients, it may be necessary to spread the word on some of the other big-name clients the business has had. Once a business has obtained a few large contracts, using them to help promote services and secure other clients can be highly beneficial. Business owners can mention previous jobs in meetings or display work for other clients

Superannuation-Related Obligations Employers Need To Keep In Mind

While the hustle and bustle of operating and managing a business can occupy your mind, it’s important not to forget your superannuation obligations to your employees.

Those who fail to meet their super obligations risk facing severe and even damaging liabilities, penalties and even potential imprisonment. Are you aware of your obligations?

Employees (after entering the workforce) should have a ‘stapled’ super fund that you must pay their super into or the right to nominate a super fund. However, if an employee is not eligible to choose, does not have a fund or fails to notify the employer, the employer must pay their contributions into an employer-nominated or default fund.

The employer-nominated or default fund must be a complying fund (meets specific requirements and obligations under super law) and be registered by the Australian Prudential Regulation Authority (APRA) to offer a MySuper product.

Some super funds may ask that an employer becomes a ‘participating employer’ before they can pay contributions to them. Participating employers may have to make super payments more frequently, such as monthly instead of quarterly.

For example, you need to make sure that you are meeting the super guarantee contributions now for all of your employees, including those who would have previously fallen under the $450 threshold.

Before 1 July 2022, employers who paid their workers $450 or more before tax in a calendar month had to pay superannuation on top of the employee’s wages. Now super must be paid on any payments you make to domestic or private workers if they work for you for more than 30 hours in a week, regardless of how much you pay them.

The minimum amount of superannuation that an employer must pay to their staff in Australia is called the superannuation guarantee (SG).

Under the superannuation guarantee, employers have to pay superannuation contributions of 11% (from 1 July 2023) of an employee’s ordinary time earnings when an employee is: over 18 years, or. under 18 years and works over 30 hours a week.

Currently, it must be paid at minimum four times per year, but from 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages. This will be known as ‘payday super’, as more consistent contributions will mean that superannuation funds should be better able to increase their compounding potential.

Employers can claim a tax deduction for super payments they make for employees in the financial year they make them. Contributions are considered paid when the employee’s super fund receives them.

Missed payments may attract the SGC (superannuation guarantee charge). While the SGC is not tax-deductible, employers can use a late payment to reduce the charge or as a pre-payment of a future super contribution (for the same employee), which is tax-deductible

The Tax Implications Of The Sharing Economy: What You Need To Know

In Australia, any income earned by a job may be considered taxable income. Those who receive their income via the sharing economy are no exception to the rule.

In fact, further complications can result from incorrect understandings of how the income tax and goods & services tax may apply to those individuals. ‘

The sharing economy is a socio-economic system built around sharing resources, often through a digital platform like a website or an app that others can purchase the right to use for a fee.

Popular sharing economy services and activities that could be subject to income tax include

• Being a Driver for popular ride-sharing/ride-sourcing services and obtaining fares for those services
• Renting out a room, whole house or a unit on a short-term basis
• Sharing assets (such as cars, parking spaces, storage space or personal belongings) through platforms such as Camplify, Car Next Door, Spacer, Toolmates or Quipmo.
• Creative or professional services provided by individuals through online platforms to fill a need of others (also known as the gig economy)

You need to remember some things about the income and goods & services tax for these popular sharing economy services, including:

Ride-Sourcing/Ride-Sharing

If you’ve ever caught an Uber or gotten a Lyft, you’ve been on the passenger side of ride-sourcing. The income received from ride-sourcing is subject to goods and services tax (GST) and income tax is applied to it. All drivers on ride-sourcing platforms in Australia must have an Australian business number and be registered for GST.

GST requires:

• An ABN
• GST is to be registered from the day you start, regardless of how much you earn.
• GST is to be paid on the total fare.
• Business activity statements (BAS) to be lodged monthly or quarterly.
• To know how to issue a tax invoice (any fares over 82.50 must be provided if asked).

Income tax needs to:

• Include the income you earn in your income tax return
• Only claim deductions related to transporting passengers for a fare, including apportioning expenses limited to the time you are providing a ride-sourcing service
• Keep records of all your expenses and income.

Renting out all or part of your home

Renting out all or part of your residential house or unit through a digital platform can be an easy way to supplement your income, especially if you aren’t using the property at that time. If you do this, you:

• Need to keep records of all income earned and declare it in your income tax return
• Need to keep records of expenses you can claim as deductions
• Do not need to pay GST on the amount of residential rent you earn.

Sharing Assets (Excluding Accommodation)

Assets that can be shared through a platform include personal assets (e.g. bikes, caravans), storage or business spaces (e.g. car parking spaces) or personal belongings like tools, equipment and clothes.

When renting out or hiring these (share) assets that you own or lease through a digital platform, you:

• Need to declare all income you receive in your income tax return
• Are entitled to claim certain expenses as income tax deductions
• Need to keep records of the income you earn and of the costs you can claim as deductions

Providing Services

Providing time, labour or skills (services) through a digital platform for a fee requires you to report income in your tax return. Deductions for expenses directly related to earning this income can be claimed, and records must be kept to support these claims.

The following services that can be provided are considered to incur assessable income that needs to be reported in your tax return:

• Delivering goods
• Performing tasks and activities
• Providing professional services

Those who fail to declare their income from their sharing economy side hustle may incur penalties in the form of interest on their tax bills or potential criminal charges.

You must ensure your tax return is correctly lodged and all income is declared if you are a gig economy worker. If navigating your tax return feels daunting, consider contacting us for assistance.

When It Comes To Tax, Is It A Business Or A Hobby?

There are critical differences between having a hobby and running a business, and they mostly have to do with your tax, insurance and legal obligations.

Understanding the characteristics of businesses and hobbies is essential to ensure you correctly determine your activities.

Are You In Business? 

While there is no single, defining factor that determines whether or not you are in business, some of the factors that you still need to consider include:

• You intend to make a profit – or genuinely believe you will make a profit from the activity – even if you are unlikely to do so in the short term.
• You’ve made a decision to start a business and have done something about it to operate in a businesslike manner, such as:
  • registered a business name
  • obtained an ABN.
• You repeat similar types of activities.
• The size or scale of your activity is consistent with other businesses in your industry.
• Your activity is planned, organised and carried out in a businesslike manner. This may include:
  • keeping business records and account books
  • having a separate business bank account
  • operating from business premises
  • having licenses or qualifications
  • having a registered business name.

The Benefits Of Running A Business 

If you run a business you can:

•  apply for an ABN to use in your business transactions
• have the flexibility to manage your time and work your own hours
• register a .com.au website or a .au website once you have an ABN
• access to government information, services and concessions for business
• establish a business identity when selling to customers and other businesses
• claim tax deductions for business expenses against your taxable income.

Is It A Hobby? 

A hobby is a pastime or leisure activity conducted in your spare time for recreation or pleasure. While you may create a business from the starting point of a hobby (such as crocheting or painting, etc), that is not the primary purpose of the hobby.

The Benefits Of A Hobby

Having a hobby allows you to:

• gain personal enjoyment and satisfaction from the activity
• gift or sell your work for the cost of materials
• do it in your own time or when people contact you
• have no reporting obligations of a business.

What Are The Differences? 

The key differences between a business and a hobby are as follows:

• Declaring Payments:

You do not need to declare the amount made from your hobby to the ATO. However, you must declare your income to the ATO in your annual return as a business.

• Claiming Tax Deductions:

You cannot claim a deduction for any losses from your creative work if it is a hobby. As a business, you can claim for deductions on your expenses and generally need an ABN to do this.

• Keeping Records:

You do not need to keep records of your hobby for the ATO, however it’s good practice to keep records in case your circumstances change.You must keep records for your business for tax and other obligations.

• Licences & Permits: 

Generally, you will not need to hold licences and permits for your hobby. However, you may need licences and permits specific to your type of business.

• Australian Business Number (ABN) eligibility:

As a hobby, you are not eligible for an ABN for a hobby, however if you sell goods or services to businesses, they may ask you for an ABN when they pay you. You can use a Statement by a supplier form to avoid the business withholding an amount from the payment to you for not having an ABN. The statement lets the business know you are selling the goods or services as a hobby.

As a business, it is not compulsory for businesses to register for an ABN, however getting an ABN is free and makes running your business easier, particularly if you have to register for other taxes like GST. Without an ABN, other businesses must withhold 47% from payments they make to you for tax purposes.

• Selling Goods

If you’re selling goods, you’ll need to comply with Australian Consumer Law (ACL). Your customers have automatic rights if they buy a product that breaks easily, doesn’t work or doesn’t perform as generally expected.

If you are not sure about whether your activity would be classified as a business or hobby, you can seek professional advice from an accountant, legal expert or business adviser who can help you decide what exactly it is that you’re running.

What Happens To Superannuation When Bankruptcy Is Declared?

Have you ever wondered what happens to superannuation when someone claims bankruptcy?

Bankruptcy is a legal process that can be commenced when you are declared unable to pay your debts. It is a process that can release you from most debts, provide relief and allow you to make a fresh start.

However, bankruptcy is not a process to enter into lightly.

There are two ways to enter into bankruptcy. These are:

• Voluntary Bankruptcy: The Australian Financial Security Authority appoints a trustee when you become bankrupt. This trustee is a person or body who manages your bankruptcy.

• Sequestration Order: Where you nominate yourself for bankruptcy by submitting a Bankruptcy Form.

When you become bankrupt, the Australian Financial Security Authority appoints a trustee. This trustee is a person or body who manages your bankruptcy.

The trustee can take any cash or money you have in a bank account at the date of bankruptcy but should leave you with enough for modest living expenses.

During your bankruptcy, you can keep the income that you save. However, you may have to make compulsory payments if your after-tax income exceeds a set amount. This amount changes with how many dependants you have.

When you are bankrupt:

• You must provide your trustee with details of your debts, income and assets.
• Your trustee notifies your creditors that you’re bankrupt, preventing most creditors from contacting you about your debt.
• Your trustee can sell certain assets to help pay your debts.
• You may need to make compulsory payments if your income exceeds a set amount.

What Happens To Superannuation?

When someone goes bankrupt, their bankruptcy trustee can recover or sell any assets considered divisible property.

The Bankruptcy Act sets out what is and what isn’t divisible property.

A bankrupt’s superannuation is generally not considered divisible property and is not available to a bankruptcy trustee.

However, it depends on when and how you receive your super. Your trustee must be notified if you receive superannuation before or after your bankruptcy begins.

If Received Before Bankruptcy

• Super payments received before bankruptcy are claimable by your trustee
• Any asset purchased with those funds (such as a house) can be claimed by the trustee

For example, if you have taken funds out of your superannuation fund before bankruptcy and you still hold them in your bank account at the time of bankruptcy, the funds will be considered divisible property and you will have to pay any funds still held to your trustee.

This includes both funds taken out as a lump sum and as a pension.

If Received During Or After Bankruptcy

Super payments that are during or after bankruptcy:

• are not claimable by your trustee if it is a lump sum payment

• your trustee cannot claim assets you purchase with those funds, e.g. car.

An exception is where your super isn’t in a regulated fund, approved deposit fund or an exempt public sector scheme. Your trustee can claim super not held in these types of funds.

Received As Income

During bankruptcy, the super you receive as an income stream (e.g. a pension) forms part of your assessable income. You may need to make compulsory payments if your income exceeds a set amount.

Self-Managed Super Funds

Someone bankrupt cannot be a trustee of a self-managed super fund. If you have a self-managed fund, you must advise your trustee. You must cease acting in this position and notify the ATO within 28 days. See the ATO website for more information about removing yourself as a trustee.

Are you facing bankruptcy and concerned about risks to your superannuation fund? Speak with a licensed professional today.

Maximising Your Tax Deductions As A Home-Based Business

Small business owners may be able to claim deductions for the costs of using their home as a principal place of business when filing their income tax returns.

A home-based business is one where an area of your home is set aside and used exclusively as a place of business. If you do not have an area set aside and used exclusively as a place of business, but you do some work from home, you may still be able to claim a deduction for some of your expenses relating to the area you use.

Tax deductions may be claimed for the business portion of household expenses; however, ensuring you are claiming expenses you are entitled to can be challenging. How you operate the business out of your home will determine the expenses that may be claimed. Your business structure will also affect your entitlements and obligations when claiming deductions on home-based business expenses.

Generally, three types of expenses can be claimed: running expenses, occupancy expenses, and in some cases, the cost of motor vehicle trips between your home and other locations (if the travel is for business purposes). You can claim occupancy and running expenses if you have an area of your home set aside as a ‘place of business’.

Running expenses refer to the increased costs of using your home’s facilities for the running of your business, including:

• Repairs to your business equipment.
• Heating, cooling and lighting a room.
• Cleaning.
• Phone and internet.
• Depreciation of business furniture and equipment.

To calculate the running expenses of your home-based business, you must ensure that you exclude your private living costs and that you have records to show how you calculated the expense.

Occupancy expenses are those that you pay to own or rent your home, including:

• Mortgage interest or rent.
• Land taxes.
• Council rates.
• Insurance premiums.

Occupancy expenses are calculated based on the floor area of your home that is used for the business and the portion of the year that it was used.

Small business owners should note that capital gains tax (CGT) payments may be required when your home was used for business. However, CGT won’t apply if you operate your business from a rented home, didn’t have an area expressly set aside for your business activities or the business was run through a company or trust.

Records that need to be kept include written evidence, tax invoices and receipts, and should substantiate your claims for all home-based business expenses. This needs to be kept for at least 5 years to substantiate your claims.

Your business structure can affect the method you can use and the expenses you can claim, especially if your business is a company or trust. If you are a sole trader, a partnership or a company or trust, there are specific rules that may apply to you. Speaking with a trusted tax adviser is the best way to ensure you comply with those guidelines – why not start a chat with us today?

Gender & The Super Gap – How Does Yours Compare?

The superannuation gender gap has been a subject of serious concern for at least half of Australia’s population.

Women are more likely to have significantly less money saved for their retirement, less assets and far less super than men, putting them in a place of greater financial stress and concern.

For example, a woman in the 20-24 age bracket may have an average super balance of $8,051, while a man in the same bracket is expected to have an average balance of $9,481. In the 40-44 age bracket, the average super balance for men is $134,992, while women in that age group may only possess $98,572.

The superannuation gap is facilitated by various factors that often adversely affect women more than men.

Men and women may have different super balances due to pay gaps, salary differences and potentially the amount of time they have spent working (maternity leave, working part-time versus full-time etc., taking time off work for travel, etc.).

Some key contributing factors include:

Pay Disparity (The Wage Gap)

In Australia, the gender pay gap is 22.8%.-  for every $10 earned by a man, a woman (on average) will only earn $7.72.

Caregiving

Time taken out of the workforce for the purpose of caregiving is predominantly done by female employees. Females account for more than 70% of primary caregiving, on average, taking five years out the workforce. Their caregiving responsibilities may range from childcare to looking after ill or elderly family members.

Part-time Workers

Women are more likely to work part-time or casually than men, contributed to by a lack of workplace flexibility to accommodate care responsibilities. This not only affects the amount women earn, but career and wage progression.

Compound Interest Effects

Compound interest makes super a powerful tool when saving for retirement as interest is paid on both the principal and interest from past years: a bit like the snowball effect – over time you see exponential growth.

A lifetime of earning widens the gap, and compounding interest deepens this divide. Males are earning compound interest on their more considerable savings, which means more interest in the long term.

There are three proposed measures concerning how the superannuation gap could be addressed at a macro level. These include:

• Including superannuation guarantee contributions in the Commonwealth Paid Parental Leave scheme, as a majority of recipients are women, and it is a leading cause of the gap exacerbation.
• Allowing unused concessional contributions to be made for recipients of Commonwealth Paid Parental Leave without time limits is harming women’s superannuation outcomes, so the policy needs to be changed accordingly.
• Amending the Sex Discrimination Act to ensure employers can make higher superannuation payments for their female employees if they wish to do so without contravening the existing legislation.

Here are some examples of ways in which women can increase their super balances to make up for any losses that may have been incurred until legislative action is taken to amend this discrepancy:

• Contribution splitting – by having their spouse transfer some of their superannuation contributions over to their account, their account can be increased.
• Salary-sacrificing contributions into their super to make up for the shortfall from not working in the previous year.

If you are concerned about your superannuation or would like further advice, please speak with us.

Cash Flow Health Check In The New Financial Year

Throughout the financial year, there may be periods where your business finds itself facing a recurring problem with its cashflow.

Small businesses with cash flow issues may find themselves more at risk of failing or suffering significant financial hardship – during these critical times in the business landscape, this is not an ideal situation.

Cash flow provides a business with stability so they can pay employees, avoid loan defaults and pay the overheads necessary to keep their business up and running. Follow these tips to boost your cash flow to secure your business’ future.

Perform A Business Health Check

Preparing financial statements will give you an objective insight into the health of your business. Identifying if you have a cash flow problem is the first step to coming up with solutions. The following reports will allow you to see if your cash flow is up to scratch.

•     A balance sheet will tell you what your business is worth on any day. The value of your business is calculated by subtracting your liabilities from your assets.
•     Profit loss statements reveal if your income is meeting your expense requirements. If your profit is dipping below your expenses, it is time to change.
•     Cash flow reports reveal the money going in and out of your business over a set period and identify peak and off-peak periods

Use A Business Budget

After analysing your cash flow situation, is your cash flow cyclical?

Creating a yearly budget is not only imperative to receive financing in future, but will also help you identify the best months to save to cover the quieter months.

Where applicable, business owners can consider flexible rostering, whereby employing casuals and using a flexible roster can help you cut back on hours when you need to improve your cash flow in quiet periods.

When you have identified your quieter periods of the year, try to find additional revenue streams for when cash is low. Is there a product or service that could be introduced? Work with your team for new ideas to cover low cash months.

Get On Top Of Your Accounts Receivable

Allowing late repayments jeopardises your cash flow and can put you in a tight financial spot. Avoid being out of pocket by implementing some of these credit policies:

• Collect the debts on time – allowing late payments means that you’re without those funds for longer
• Offer an early bird discount to incentivise early repayments – it pays to repay that kindness
• Set credit limits and payment terms – know exactly what your terms and conditions are so that you can make sure that those who owe you are abiding by them
• Make credit applications and carry out credit checks on all new customers
• Penalise late payments with interest – set a specific interest rate that will apply and which you deem as fair.
• Consider cutting down on inventory – unsold stock can be a waste of funds, and if you’re finding yourself with plenty of it, you may not need to be ordering as much.
• Request upfront payment or a non-refundable deposit where viable, especially when dealing with large orders.

If you’re looking for assistance with invoicing, chasing payments or a general checkup of your business’s cash flow situation, accountants like us are equipped to help. Speak with us to find out what we can do for you.

Have You Taken The Time To Tax Plan This EOFY?

As the financial year comes to a close, now is the time to visit your accountant or tax advisor to discuss tax planning for your business in 2023.

At the end of every financial year, business owners should be reviewing and measuring their performance in comparison to the previous year.

By regularly reviewing this information, a greater understanding of the basis for tax planning and budgeting can be determined more accurately. While tax planning is a process that should be continuously managed over the year for better and more adaptive results, it’s never too late to start.

This is especially relevant now as business owners need to understand the business’s current ability to move forward in the current economic circumstances and plan for the future. Otherwise, past mistakes could be repeated in the future.

Here are some general tax tips that business owners can take with them into the 2023-2024 financial year.

Timing Of Expenses

An expense is an allowable deduction that is necessarily incurred in carrying on a business or for the purpose of gaining or producing assessable income. Expenses should be recognised in the same period as the revenues to which they relate when it comes to lodging your tax.

Most prepayments that are made now are not deductible until the period to which they relate (though some exceptions may apply). Small businesses and individuals may be able to deduct 12 months of prepayments in the year paid, as an expense.

Payments to Workers

Deductions on payments to workers (whether they are employees, contractors, directors, etc.) can only be claimed when the business has complied with its PAYG withholding and reporting obligations.

Family businesses or businesses that employ family members should be especially concerned with preparing for this, as they have additional obligations to ensure that they are correctly paying the right amount of tax. If they have received wages or been given allowances below the tax-free threshold, they will need to be registered as a withholder and a PAYG summary provided.

Your business should already be in the position to process payments through Single Touch Payroll, as it was made mandatory for all businesses to use from 1 July 2021.

Bad Debts

Conduct a review of the debts that may be affecting your business. If any of these are unlikely to be recovered, the best course may be to write them off as ‘bad’ prior to the end of the financial year. You can speak with us about this process to ensure that it is performed correctly (and that you are able to do so). Writing off bad debts can reduce your income tax and generate a GST refund.

Bonuses

Businesses may have provided their staff with bonuses at the end of the calendar year for performance expectations being met or as a retention bonus. It is important to remember that bonuses are only deductible when they are actually incurred.

If you have concerns regarding your tax planning this year, why not speak with one of our trusted advisers? We have the knowledge and experience to assist you with your tax planning needs.