Maximising Deductions
Business taxpayers
• Debtors should be reviewed prior to 30 June to identify and to write off any bad debts.• Review the asset register to identify any low-cost and/or low-value assets that may be pooled to access an accelerated rate of depreciation.
• Write off any depreciating assets which are no longer being held for use because a deduction may be available.
• Review trading stock for obsolete stock for which a deduction is available.
• Employees’ superannuation contributions should be paid before 30 June to obtain a deduction and to avoid the Superannuation Guarantee Charge.
• A one-off bonus deduction for new investment in tangible depreciating assets purchased between 13 December 2008 and 31 December 2009 may be available. The bonus deduction is in addition to the depreciation deductions available to taxpayers.
• From 1 July 2009, losses incurred by individuals with an adjusted taxable income of $250,000 or more from non-commercial business activities will be quarantined even if they satisfy the four commerciality tests.
Non-business taxpayers
• Investors should consider prepaying interest on margin loans to obtain a deduction.• Outgoings incurred for managed investment schemes may be deductible following a Full Federal Court decision.
• A recent decision of the Full Federal Court held that a taxpayer deriving Youth Allowance was allowed a deduction for various self-education expenses. (The Commissioner has sought special leave to appeal to the High Court against the decision.)
• Assets costing $300 or less may qualify for an immediate deduction subject to certain conditions.
• A deduction for personal superannuation contribution is available where the 10% rule is satisfied.