Speaking to Accountants Daily, Kevin San and Associates director, Kevin San, said the instant asset write-off is something he recommends that small-to-medium business clients look at ahead of EOFY, especially those with upcoming capital purchases.
He said that there’s a reasonable expectation that the write-off will be rolled out for another year given the discussion surrounding tax cuts during this year’s budget.
“One consideration I think any accounting business has to keep in mind is to review your profitability and likely tax outcome and your purchasing decisions,” he said.
“You've got one-and-a-half months left to buy anything that you might need or you're planning to buy anyway. This will of course whittle down your tax liability for this year.
“But in theory, it's meant to come down from $20,000 to $1,000 on 1 July, so better to be safe than sorry. For clients who have upcoming capital purchases anyway, it's something you definitely recommend they look at.”
Another item Mr San said small businesses should be discussing with their accountant around EOFY is the director loan accounts.
“Make sure the accounts are actually not pointing the other way and that the director owes the business money, because that could actually lead to some adverse tax consequences,” he said.
Are you thinking of expanding your offering into SMSFs to grow your client base? Become a pro at SMSF fundamentals and make your clients bulletproof with the SMSF Foundations course. Learn directly from Aaron Dunn from Smarter SMSF as he deep-dives into the fundamentals you need to know to successfully undertake your work as an SMSF practitioner. Earn up to 21 CPD hours! Learn more