As the financial year draws to a close, April and May are two of the most important months for small business owners across Australia. Rather than scrambling in June, this is the ideal window to get organised, optimise your position, and potentially reduce your tax bill. A proactive approach now can make a significant difference—not just financially, but also in reducing stress.
Here are key tax tips to consider before 30 June.
- Get Your Financials Up to Date
Before making any decisions, ensure your bookkeeping is accurate and current. This includes reconciling bank accounts, reviewing expenses, and confirming all income has been recorded correctly.
Up-to-date financials give you a clear picture of your profit position, allowing you to make informed tax planning decisions. If your numbers aren’t reliable, your strategy won’t be either.
- Review Your Profit and Forecast Your Tax Position
April and May are perfect for forecasting your expected profit and estimating your tax liability. This allows you to avoid surprises and gives you time to act.
If your business has had a strong year, you may consider strategies to manage taxable income. On the flip side, if profits are lower than expected, you can plan cash flow accordingly.
- Bring Forward Deductible Expenses
If cash flow allows, consider prepaying certain business expenses before 30 June. This may include rent, insurance premiums, subscriptions, or professional services.
Bringing forward expenses can reduce your taxable income this financial year, potentially lowering your overall tax bill. However, it’s important to ensure these decisions align with your broader cash flow and business strategy.
- Review Asset Purchases and Instant Asset Write-Off Rules
Depending on current thresholds, small businesses may be able to immediately deduct the cost of eligible assets under the instant asset write-off scheme.
If you’ve been planning to upgrade equipment, vehicles, or technology, bringing forward these purchases before EOFY could provide a valuable deduction. Be mindful that eligibility rules and thresholds can change, so confirming current legislation is essential.
- Check Your Superannuation Contributions
If you employ staff, ensure all superannuation obligations are up to date. Unpaid super is not tax deductible until it is actually paid.
For business owners, making additional concessional super contributions before 30 June may also be a tax-effective strategy, while helping build long-term retirement savings.
- Write Off Bad Debts and Review Stock
Now is the time to review your accounts receivable and identify any bad debts that are unlikely to be recovered. Writing these off before EOFY may allow you to claim a deduction.
Similarly, conduct a stocktake and write down any obsolete or damaged inventory. This ensures your stock value is accurate and may reduce taxable income.
- Stay on Top of ATO Obligations
Make sure your BAS lodgements, PAYG withholding, and other compliance obligations are current. Falling behind can lead to penalties and unnecessary attention from the ATO.
If you’re experiencing cash flow challenges, it’s far better to engage early and explore payment arrangements than to ignore the issue.
- Consider Timing of Income
Where appropriate and compliant, you may consider deferring income until after 30 June—for example, delaying invoicing for work not yet completed.
This strategy must be applied carefully and ethically, ensuring it reflects genuine business activity and complies with tax regulations.
Why Advice is Paramount
Tax planning is not about cutting corners—it’s about making informed, strategic decisions within the rules. Every business is different, and what works for one may not work for another.
Seeking guidance from a qualified accountant can help you identify opportunities, avoid costly mistakes, and ensure you’re fully compliant with current legislation. They can also help you align your tax strategy with your broader business and financial goals.
Final Thought
April and May are your opportunity months. By taking action early, you can move into June with clarity and confidence—rather than pressure and uncertainty.
A few proactive steps now could make a meaningful difference to your tax position and set your business up strongly for the new financial year.
If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.
This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.
(Feedsy Exclusive)
