Gavin Ma & Co’s reminder for small businesses for 30 June

We would like to reminde small businesses of three things to remember as 30 June 2023 approaches:

• Small business boosts now available – a “bonus” 20% tax deduction for eligible expenses is available for small businesses investing in digital operations (eg technology, cloud-computing, einvoicing and cyber security), or skills and training for new and existing employees. For every $100 spent, a $120 tax deduction is available (caps apply) for investments made between 29 March 2022 and 30 June 2023.

• Temporary full expensing (“TFE”) ends on 30 June 2023 – small businesses can still claim an immediate deduction for the cost of eligible assets first used or installed ready for use by 30 June 2023 in this year’s tax returns. The end of TFE on 30 June 2023 means that the cost of assets that are not already being used or installed ready to use by 30 June 2023 are not eligible for an immediate deduction.

• Deduction rate changes – both the running a business from home deductions and the car expense deductions have changed for this tax time. The new cents per kilometre rate is 78 cents and the car limit has increased to $64,741 for 2022-23. The working from home deduction methods have also changed for this year. Small businesses can choose one of two methods to claim working from home deductions, ie either the actual cost or fixed rate method.

Our clients shoud not to rush lodging their annual income tax return from 1 July. Taxpayers who lodge before their income statement is marked as “Tax ready” run the risk of processing delays and follow-up questions from the ATO if their return is incomplete.