What is your tax plan?

Are you one of those people or businesses that just leave everything to the last minute? If you leave your tax return until the end of the year you just might be in for a nasty tax surprise without being able to do anything about it.

It’s tax planning time NOW. The best businesses already know where they are at. It's the time of year where you should look at your income tax, especially as it is often one of the biggest expenses in most businesses.

Tax planning enables you to clearly understand what taxes you will be liable to pay, so that there are “no surprises” when it's time to do your tax return.  It's about knowing your position, taking advantage of tax opportunities, understanding your cashflow and planning for the future.

Take more control of your financial world and let us help you with your tax plan.

Some 2013 Tax Planning Tips

One of the changes that were introduced at the commencement of the 2012 was some generous changes to the immediate write-offs rules for new assets purchased.

Depreciation applies to most business assets but the rules vary depending upon whether or not you are a small business entity (SBE). A small business entity is basically a business with turnover in the current or previous year of less than $2 million before GST.

If you are a SBE then you can receive an immediate write-off for any individual depreciating assets costing less than $6,500 (pre GST). Any assets costing more than $6,500 would not receive an immediate deduction but rather a flat write-off of 15% this year and 30% for each year thereafter.

If you are not an SBE the government in its wisdom has left the immediate write-off threshold at $300. However, if the asset costs less than $1,000 (ex GST) then a non SBE can claim a flat 18.75% in year 1 and 37.5% in subsequent years.

There are also immediate deductions of up to $5,000 for any new motor vehicles purchases. This applies whether you are an SBE or not.  In addition to this you will receive your normal depreciation deductions on the motor vehicle.

For example if you are a SBE and purchase a $40,000 motor vehicle excluding GST, you will receive a flat write-off of $5,000 plus a 15% write-off on the remainder ($6750) in the first year of ownership and a 30% deduction in the following years.

If you are a non SBE you will receive a flat write-off of $5,000 plus normal depreciation (18.75% per annum) calculated on a daily basis.