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As the end of the financial year fast approaches, real estate businesses can yield significant returns from fully leveraging the tax deductions available to them.
Chartered accountant Allan Mason relayed his belief that “it has never been more important to bolster your business’s trajectory for the year ahead, than now”.
According to the business tax expert, “nearly 20 per cent of taxpayers underclaim their deductions because of poor record keeping”.
Citing recent insolvency data from ASIC which revealed that 7,742 companies entered external administration from 1 July 2023 to 31 March 2024, Mason cautioned that many of the failures had stemmed from large tax debts.
His advice? “As a business owner or salary earner, claim every cent you are entitled to claim, and the important thing is to plan.”
“Do some figures now and work out what your likely tax will be. Then act accordingly to minimise it as much as possible. It may even mean catching up on any unused, prior-year personal superannuation caps,” Mason stated.
To help real estate businesses stay ahead this tax time, Mason has detailed the strategies that business owners can use to optimise the tax concessions at their disposal.
Mason’s top tax tips are:
- Evaluate the feasibility of recovering bad debts – if there is no likelihood of recovery, bad debts should be written off before 30 June.
- Consider prepayments. These can be made up to 12 months in advance for costs like office rent – prepaying a full year in advance can garner a tax deduction at EOFY 2024.
- Superannuation paid to employees is “100 per cent tax deductible” if paid by the end of the financial year.
- Capital items and equipment of values up to $20,000 should also be claimed, with some businesses potentially able to qualify for 100 per cent write-off.
- Remember that business expenses including but not limited to purchases, wages and training are all tax deductible.
- Maintain an accurate log of all business expenses incurred throughout the year. When possible, make purchases in this financial year, rather than waiting until next year.
Paraphrasing the late Kerry Packer, one of his former clients, Mason said: “The money is better in your pocket than the government’s.
“After all, the government doesn’t spend your money that wisely to justify you donating more.”
Landlords looking to further optimise their rental investments also shouldn’t miss the 10 EOFY tips they can use to maximise their rental property returns.
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