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As we creep closer to the end of the financial year, it’s time to start thinking about tax returns! Here’s the promised mega video of tax tips to help you all get ahead of the pack! As usual, below are also some more of this month’s useful links and advice! Enjoy.
Contents
Tip of the Month
Are you paying too much income tax in your business or personal name? If you are making money then, of course, you are paying tax. However, it’s far greater to pay just enough rather than more than you should, as the late Kerry Packer would say! The income tax you pay varies depending on what type of structure the profits are retained in.
For example, if your business is making $120,000 in profits and you operate as a sole trader, you will be on the 39% tax rate (including Medicare levy). If you make over $180,000, you will be on the 47% tax rate. That’s nearly half your profits!
In most cases, we structure small businesses as a Pty Ltd Company when they are turning over $120,000 in profits. That way they can enjoy a lower tax rate at 27.5% which can potentially be a tax saving of around 11-20% of your profits!
Additionally, paying some of your profits into your superannuation fund can result in you only paying a 15% tax rate.
Make sure you review your small business structure with your accountant if you think you are paying too much tax!
BONUS: We created a video explaining how tax deductions can further help you reduce your tax liability for your business.
Updated Group Structure for Small Businesses
A regular thing I bring with me to meetings with new clients is our group structure for small businesses. We updated our group business structure options to include a bucket company (rather than a holding company). This new structure makes it easier for small businesses to claim the Small Business CGT Concessions which means you can potentially pay absolutely ZERO tax on the profits when you sell your business.
You can access the business structure template here.
As your business grows your structure should grow with it. This ensures you can protect your assets, maintain growth, minimise tax and save in costs. It pains me to see clients pay too much tax when they don’t need to or lose their business and personal assets because they aren’t/won’t be structured properly.
Be sure to contact me for further information if you would like to understand how our small business group structure can help your business.
Important Upcoming Dates
5th June: If you had an extension for your tax returns then it will most likely be due now
21st June: May Monthly BAS Due
25th June: FBT Return Due
30th June: Superannuation must be paid by this date to qualify for a tax deduction
What’s Happening at Box AS
We’re changing things up with some of the content we put out to help you to continue to grow your business. Earlier this month, I shared a video on why I credit Kobe Bryant’s “Mamba Mentality” towards the success of my own business. I hope you find some inspiration and motivation with this personal journey I share with you.
As always, thanks again for your continuous support and viewership!
Kind Regards,
Davie Mach CA, B. Comm (Accg & Tax)
Email: dmach@boxas.com.au
Phone: (02) 8005 1107
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