This is applicable more so for service-based businesses where you're primarily providing a service. You can choose to pay tax on what they call the receipts based method of your sales, rather than an accruals basis which is when you raise the invoice. So we've had tradies where they made $200,000 in profit on an invoice base, but they were owed $200,000 at the end of the year. So, really they made no profit from a cash perspective. We can take that off their income and they pay no tax there.
Bring forward expenses.
As a small business, you can pre-pay up to 12 months of expenses. An example is pre-paying rent. You could even pre pay-rent into a self managed superfund up to 12 months for a small business and claim it. Usually, this is the sort of thing we do in June for pre-paying the next financial year. We've had clients top up the stationery cupboard. If you know your travel schedule for the next 6 to 12 months you could book in some flights, or pay for some hotels you would otherwise have to pay for anyway. We have clients pre-pay accounting fees as well, which is a nice bonus in June.
Accelerated asset depreciation.
If you purchase an asset, like a printer, a car, a desk that's not built into the floor, anything that you can pick up and move, you can write off if it's under $150,000 at the moment. Now that was extended through till the end of December. This is relevant if your business is equipment heavy, medical practices will be one of those. Manufacturing is another big one.
With cars, the limit is around $59,136. If the car costs more than that, and it's not considered a commercial vehicle (ute, van or truck), that would be exempt. You can claim more than the $59k. Tradies are usually fine with their utes as an example.
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