Whether you run or manage a business, are an employee or an investor, a student or retired, there are matters you should consider before the end of the financial year?  These may include reviewing your superannuation strategies or the timing of income, deductions or sales of assets.

Superannuation - Small Business

If you run your own business, one simple way of simultanouesly reducing your tax and increasing your retirement savings, is to transfer funds into your superannuation funds prior to 30 June and claim a tax deduction. However, please ensure your don't exceed the new annual superannuation contribution caps which are $25,000 for those under 50, and $50,000 for those 50 and over.

In addition, superannuation contributions are only tax deductible in the year that they are made, so as a smail business owner, you may want to consider the timing of your June Quarterly employees superannuation payments, and whether you want to bring them forward until June, or leave them to July to claim in the 2012 tax year.

Superannuation - Individuals

Generally, personal superannuation contributions are not tax deductible for "salary and wage" earners. However, you may be eligible for the government's superannuation co-contribution if your taxable income for the 2011 year is below 61,920.. Again, the contribution must be received by the fund prior to 30 June 2011 to be eligible for the co-contribution on your 2011 taxable income.

Timing of Income/Deductions/Capital Gains/Losses

Depending on whether you expect your income to be higher this year or next year, you may be able to defer or bring forward income or expenses to be included so that they are included in the year which will benefit you most from a tax perspective. If you are planning to sell any assets that will be subject to capital gains tax, you may also wish to consider which year will be the most tax effective for this to be included in.

With the sale of property, it is the date of contract that is relevant for the tax year in which the sale is included, not the settlement date.

As an aside, with the new rules regarding family tax benefits and investment losses, prepaying interest or other expenses on investment properties or shares, may be tax effective, but may not be effective with regard to your adjusted income calculation for family tax benefits or other government assistance.

Other Matters

Other matters which you may need to consider prior to the end of the financial year include conducting a stock take, commencing a motor vehicle log book and writing off (with evidence) any debts which have gone bad.

QuickBooks recently released the 2011/2012 versions of their accounting software range.  QuickBooks 2011/12 includes the following new features and improved functionality:

• Company Snapshot
  A new, fully customisable Company Snapshot will allow you to personalise the information displayed using 19 different measurables to review the performance of your business. Display the most significant information for your business and drill down into transaction, customer or support details.

• Reckon GovConnect
  Save time and experience real-time feedback on your activity statement lodgement using Reckon GovConnect, Reckon's new SBRTM enabled software. You’ll save time with pre-filled forms and receive a real-time response from the ATO on your BAS submission using the Reckon GovConnect – Activity Statement Lodgement application.

• Paid Parental Leave
  Added functionality to help you calculate payments to ensure you comply with the Federal Government's new Paid Parental Leave Scheme.

• Improved Chart of Accounts
  Take advantage of the ability to generate accounts based on your own company type as well as added functionality to allow you to import your own Chart of Accounts.

• New Search Functionality
  Effortless wildcard search functionality allowing you to search any field, including custom fields, in the Customer and Supplier lists with greater flexibility - saving you time.

• Microsoft Office 2010 Compatability
  QuickBooks 2011/12 is fully compatable with Microsoft Office 2010 allowing you the ability to export data from QuickBooks into the latest Microsoft Office products.

Scott Turner & Associates is able to provide all QuickBooks and MYOB products (including the on-line version) at prices well below RRP. We can also tailor installation, set up and training services to suit your needs.

Tax Tip: CGT - Principal Place of Residence

If you own a property that you also live in, it will generally be exempt from capital gains tax, regardless of how much of a gain you may make on the sale of the property. This is known as the principal place of residence (PPR) exemption.  But did you know there are circumstances which enable you to continue using the PPR exemption, even if you move out of the house.

If you move out of your principal place of residence and then rent it out, you can elect to continue to utilise the PPR exemption for a period of 6 years. You can only have 1 PPR at any given time however. By way of example, if you move out of your PPR and decide to rent it out and then move to a rented house yourself, you can continue to treat your house as a PPR for six years. If you were to buy a house, live in it for 2 years, then rent it out for 8 years, you capital gains tax would be calculated on the 2/10th's of the overall capital gain on the sale (being the 2 years it was rented out over the 6 years).

If you were to buy another property, while renting out your first, you must decide which property you will claim the PPR on.

If you were to not rent out the PPR at all after you move out (i.e. it was not generating any income), there is no time limit on how long you can claim the PPR for. This might be applicable, for example, if you were to move to London for work and your mother moved into your existing house.

Winter 2011 Tax and Business Calendar

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