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Taxation Planning – 6 ways of increasing your business deductions.

Increasing your business deductions is another widely used and effective means of minimising your taxation liability.

Some of the areas to consider include:

1.    Bad Debts – This will be relevant if you operate your business on an accruals basis. Review you debtor’s ledger for any customers / clients that have and will not pay.  Writing these off will reduce your assessable income and may even reduce your GST liability.

2.    Scrapping Fixed Assets – Review the asset ledger to see if there are any assets that have a NIL value or perhaps don’t even exist.  Also, accelerated depreciation for small business allows for some assets that cost less than $20,000 to be written of completely.

3.    Stock Valuation -   Stock can be revalued down from the purchase price / cost to a lower replacement value it applicable.  Further any obsolete stock can be written off.

4.    Superannuation – To claim superannuation payments for employees, the actual superannuation must actually have been paid before the 30 June.  

5.    Director Fees can be accrued and claimed in the same financial year with payment been made in the following year.  Super is only required to be paid upon the actual payment of the Directors Fees. Taxation Ruling No. IT 2534.

6.    Black Hole Expenditure - s 40-880 of the ITAA 1997, allows for the deduction of certain expenses that have not been deductible under the other provisions of the various tax acts.


If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
Phone +61 3 9428 1062

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