Are you truly prepared for the 2025 tax season? Photo: Yuri Acurs.
Canberra’s first EOFY sales have begun, which means tax season is right around the corner.
If you own a business, chances are it’s not your favourite time of year, but it is an important one. Nobody wants to pay more tax than they have to.
Keen to claim as much as possible? Avoid doing the bare minimum. Some of the most commonly overlooked deductions can reap the biggest rewards.
To start, Claudia Youngman from RSM Canberra’s business advisory division recommends finalising as many expenses as you can before 30 June.
“The first thing I’d suggest is to pay superannuation on time and before EOFY,” she says.
“Super can only be claimed when payment is received by the nominated fund on time.
“Payments for this quarter aren’t due until 28 July, but paying before 30 June will allocate the deduction to this financial year instead of the next.”
Prepay everything that makes sense, especially where discounts are offered.
Businesses with a turnover of less than $50 million can deduct prepaid expenses with a service period of less than 12 months. Any business can claim prepayments that cost less than $1000 or are required by law, regardless of its turnover.
“Staff bonuses are another deduction that adds up quickly,” Claudia says.
“You can claim bonuses that haven’t been distributed yet, but only if the business demonstrates a commitment to pay them.”
This can be done through an authorised board resolution, enterprise agreement or similar.
Have a service provided before 30 June that won’t be invoiced until 1 July or later? Claudia says you should still be able to claim it this financial year, as long as its cost can be reasonably estimated. Photo: Holly Williams.
If your turnover is less than $10 million, don’t forget to take advantage of the current limits for instant asset write-offs.
“Businesses in this bracket should make sure any assets up to $20,000 are installed and ready to use before 30 June,” Claudia says.
“An extension into 2026 is currently before parliament, but if it doesn’t pass, the limit will drop back to $1000 at year-end.”
Debts from non-paying customers that aren’t likely to be recovered should also be written off before year-end. You could be entitled to reduced GST for the period it was written off in, provided the amount was included in a previous period’s business activity statement.
Depending on their recorded value, obsolete assets you scrap or dispose of before year-end could also be claimed as deductions.
Claudia says any stock still in your inventory at EOFY should be valued at its lowest.
“The ATO allows closing stock to be recorded at replacement value, cost value, or market selling value,” she says.
“What that stock is will dictate which valuing method applies best and will reduce your tax liability the most.”
Other proactive steps you can take include exploring tax credit incentives for things like energy efficiency, apprenticeships, self-education, manufacturing investments, and cyber support.
There are also innovation incentives to consider for work in research and development. These activities don’t have to be high-tech; working to improve products or processes is just as applicable.
Accounting and tax legislation in Australia is constantly evolving and filled with technical jargon that can be difficult for the layperson to understand.
Among the many possibilities Claudia has outlined, there’s one surefire way to maximise savings this tax season, and that is to hire a professional who knows what to look for.
“Simply put, you don’t know what you don’t know,” Claudia says.
“If you’re determined to handle tax season on your own, my final advice would be to stay mindful of new rules around deductions, keep things organised, and check everything twice.
“Don’t be afraid to pause and look something up. A little extra effort now could save you a headache later.”
For more information visit RSM in Canberra.
Original Article published by Morgan Kenyon on Region Canberra.
