Tax saving strategies prior to 1 July 2020
For Individuals
A good strategy to reduce tax payable is normally to accelerate any income tax deductions into the current income year, which will reduce overall taxable income in the current year.
Despite this, for the 2020 tax season, tax planning may require consideration of an individual’s potentially reduced income as a result of the COVID-19 pandemic (where applicable), in which case a decision may be made to defer expenditure.
For Businesses
Many of our business clients like to review their tax position at the end of the income year and evaluate any year-end strategies that may be available to legitimately reduce their tax. Traditionally, year-end tax planning for small businesses is based around two simple concepts (i.e., Accelerating business deductions and deferring income). This year, consideration will obviously also need to be given to the impact of the COVID-19 pandemic on specific businesses.
Small Business Entities (SBEs) (i.e. Businesses with an aggregated turnover of less than $10 million) often have greater access to year-end tax planning due to particular concessions that only apply to them. Taxpayers that qualify as an SBE can generally pick and choose which of the concessions they wish to use each year (although see below regarding the simplified depreciation rules). The following are a number of areas that may be considered for all business taxpayers.
