Expenses such as rent, insurance and registration fees paid before 30 June that end in the next financial year can be claimed as a deduction in this year's tax return. A small business entity can claim the deduction under the 12-month rule for prepaid expenditure if: the payment is incurred for an eligible service period not exceeding 12 months.
Business assets purchased before 30 June may be able to be claimed as a full deduction in your 2019 tax return. The asset must have cost less than the threshold that applied when it was first installed and ready for use.
If the estimated difference between your opening and closing trading stock is $5,000 or less, you don't need to do a stock take. Alternatively, you can use the same amount for your opening and closing stock in this year’s tax return.
Small businesses are entitled to certain deductions when starting up a small business. The range of deductible start-up costs includes professional, legal and accounting advice and government fees and charges.
Expenditure may be fully deductible in the income year incurred if:
it relates to a small business that is proposed to be carried on
it is incurred
in obtaining advice or services relating to the proposed structure or the proposed operation of the business, or
in payment to an Australian government agency of a fee, tax or charge relating to setting up the business or establishing its operating structure
Small businesses can change the legal structure of their business without incurring any income tax liability when active assets are transferred by one entity to another.
The rollover is available where the transfer of assets forms part of a genuine restructure and applies to active assets that are CGT assets, trading stock, revenue assets and depreciating assets used, or held ready for use, in the course of carrying on a business.
Before you make any big purchase decisions it's best to have a chat with us to review your tax position and ensure that you're eligible for the concessions. If you'd like to discuss your options give us a call on (03) 5976 4082.
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