Believe it or not but March is upon us and we’re bearing down on the end of the financial year. There’s a few things you can do before the end of the financial year to help minimise your next tax bill.
1. Write off any bad debts
We all hate them, but we’ve all got one or two of them (hopefully not too many more…). Without getting too technical, if you don’t write them off before 31 March, you’ll be paying tax before you need to.
In short, write the bad debts off now, pay less tax this year. Don’t write them off, pay more tax this year, less tax next year.
2. Do any repairs you’ve been putting off
Been putting off painting the rental property for a few years? Have repairs on machinery you were planning on doing in April? Now’s the time to do them to reduce your next tax payment.
If you can bring these repairs into the 2014 financial year, you’ll be able to reduce your next tax payment. The flip side is that your tax payments for the 2015 year will be higher, but a dollar saved today is better than a dollar saved tomorrow.
Any business, from retailers to tradies, carrying large amounts of stock will either have less stock on the shelves than they think, or will have obsolete stock that needs to be thrown out.
If you carry out a stock take before 31 March you’ll be able to write off this missing/obsolete stock in the 2014 financial year. This will help reduce your next tax payment.
4. Control ACC through dividends
Your ACC levies are based on the salary you take out of your business for the year. If you swap the salary for a dividend then there’s no ACC to pay. The downside of this is that if you get injured there’s no ACC payout.
There’s a fair bit more to it than this so give us a call and we’ll talk you through it. For example you might be better off arranging private cover and reducing your ACC bill. Again, give us a call to talk about your options.
5. Home office expenses
Now’s the time to go through and pick up everything you’re legitimately entitled to claim in relation to your home office.
This includes power, rates, rent or interest on your mortgage, insurance, repairs, phone, insurance and more. You can claim a portion of these equal to the amount of your house you use for business. Give us a buzz if you’d like a hand figuring out exactly what you can claim.
There you have it – our top five tax tips for minimising your next tax bill. Want to know how to make these happen in practice? Give Hamish Mexted, Director of iif Chartered Accountants a call on 04 212 4977 for a no obligation chat.