Welcome to the Small Business Treasure Chest. I have looked again inside the chest and found some amazing jewels to share with you.
Join me over the next few days to view these very helpful tips that will help you reduce your Income Tax for 2020.
The second jewel I have found is very relatable to those who live in WA. I call it the WaitAwhile benefit.
Usually this phrase has negative connotations but in this case, it can help you reduce your tax bill for 2020.
If your Income tax is calculated on an invoice basis, then whatever sales invoices you issue before 30 June 2020 will be included in your taxable income .
If you delay issuing these invoices (WaitAwhile until you issue them) you move these income amounts into next year and reduce your tax for this year.
If your Income tax is calculated on a cash basis then ask your customers not to pay you until 1 July 2020. This will have the same effect as above.
Now you would only want to do this if you didn’t need this money in June.
Similarly with non-stock supplier invoices. You should try and bring these forward into your accounting records. for eg printing and stationery, consumables.
Just be careful that for stock purchases you would need to include these purchases in a stock figure if you do not access the simplified trading stock rules, then there would be no benefit to receiving an early invoice.
Should you wish to discuss any of the above further, please send me an email to firstname.lastname@example.org or give me a bell on 0421 824 137.