Tax time is approaching: here's 3 things you should start thinking about now
Mark Chapman, director of tax communications at H&R Block, shares his top three tips for retailers looking to prepare for tax time.
As the tax year ends, it's time to take steps to minimize the tax liability for your retail business.
Here are my top tips for year-end tax planning:
Take advantage of the temporary full allowance
One of the best tax breaks for businesses is a temporary full expense allowance. This means you can get an instant tax deduction on the cost of capital assets. With many companies offering end of year specials, now is the ideal time of year for companies to take advantage of the benefits of acquiring some much-needed assets to build your business while lowering your taxable profits.
The tax break offers an immediate deduction of all investments from your annual profits.
There's no cap on the cost of assets you can purchase, and if your business has sales of less than $ 5 billion, you're included.
The temporary full allowance runs until June 30, 2022, but from a tax perspective, purchases made immediately before the end of the fiscal year always make the most sense. Now is the time to take the plunge.
While this is not the ideal time for many retailers to make large capital purchases, if your business needs to invest in new capital goods and has the cash flow (or credit capacity) to invest in new capital goods, now is certainly the time to raise taxes These finance breaks like these will likely never occur again.
Among the items that you could claim for yourself are the following:
• Cash registers and other POS devices
• Delivery trucks
• Keep fittings
• Computers, laptops and tablets
• In business security systems
• Accounting software
Pay costs in advance
You can receive an instant tax deduction for certain prepaid business expenses.
The basic rule is that expenses that cover a maximum period of 12 months can be deducted.
This includes expenses such as insurance premiums, telephone and internet services, subscriptions to trade or professional associations, rental or leasing fees in your retail stores, and bookings for seminars, conferences or business trips.
Pay superannuation
Employers must pay the pension contributions within 28 days of the end of the quarter.
Make sure all June retirement contributions are paid by June 30th to expedite tax withholding.
Note that contributions must be actually paid, charged to the commercial bank account, and received by the employee's super fund by June 30th for a tax deduction to be available.
All other outstanding amounts should also be paid before the end of the year.
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