The end of the financial year is an important time for your small business and you, and this end of financial year is a little different for many. To help prepare for the EOFY we have put together an end of financial year checklist for 2020.
Pay quarterly super
Super Guarantee (SG) contributions must be paid by 30 June 2020 to qualify for a tax deduction in the 2019-20 financial year.
Superannuation Guarantee Amnesty
Employers who have historic SG non-compliance can self-correct unpaid amounts without penalty under the SG Amnesty. Employers can claim deductions without incurring administration charges or penalties until 7 September 2020. Payments made after this date will not be tax deductible.
Review capital expenditure
This financial year, the instant asset write-off allows eligible businesses to instantly deduct assets costing up to $150,000 on their upcoming tax return.
Small business CGT concessions
Individuals operating a small business may be eligible for capital gains tax (CGT) concessions on the sale of business assets. The small business CGT concessions are available to business taxpayers with an aggregated turnover of less than $2 million or on business assets less than $6 million.
Obsolete, slow-moving or damaged stock should be identified by 30 June and disposed of for income purposes in order to receive a deduction.
Contact the ATO
The ATO is responsive to businesses that are struggling to keep on top of their tax obligations due to COVID-19. Businesses struggling to meet their tax obligations should contact the ATO to discuss deferring payments, make variations to PAYG quarterly tax instalments, or change their GST reporting cycle from quarterly to monthly to receive quicker access to GST refunds.
Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June so that income from the payments won’t be taxed until the following financial year.
Work from home deductions
If you’ve been working from home due to the coronavirus, the ‘shortcut method’ is available to claim 80c per hour worked on running expenses. Don’t forget to include “COVID-hourly rate” to claim on your tax return.
Selling poor performing assets, such as shares, may enable you to bring forward a tax loss that can be offset against any capital gains made throughout the financial year.
Early access to superannuation
Individuals impacted by COVID-19 may be eligible for early access of up to $10,000 of their super from mid-April. Those who wish to access up to $20,000 must apply twice; once before 1 July 2020, and once within approximately three months after 1 July 2020.
If you require any assistance with your end of financial year preparation or tax planning please contact us.