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31 MARCH 2023
Year End 2023: Image
The following is a list of must-do items in preparation of year end 31 March 2023, make sure you work through a year-end process to maximise your tax deductions and minimise your tax bill.
Year End 2023: Text
Assets purchased for less than $1,000 can be expensed
Depreciation can be claimed from the first day of the month of purchase
Ensure assets traded in are disposed of and the replacement asset is depreciated and recorded at its full cost
Depreciate residential rental property chattels purchased during the year
Depreciation can be claimed on commercial property, provided it has been claimed previously or the property was newly acquired in the 2023 year
Review your fixed asset register from your 2022 financials– ensure assets sold, stolen, scrapped or destroyed are noted on the asset register and provide this list to us.
If an asset sale is expected to result in depreciation recovery, consider deferring the sale until after 31 March 2023
Review repairs and maintenance codes to ensure all assets are moved to the asset account where appropriate
Stock on hand should be valued at cost price excluding GST unless ...
Market selling value is less than cost and then use market selling value excluding GST
Carry out a stocktake at 31 March to ensure an accurate closing stock figure
Write-off any obsolete stock
If trading stock is less than $10,000 and turnover is less than $1.3m, you can use the opening stock value as the closing stock figure (even if this is nil)
Accruals and Provisions
These are not deductible in the current year unless you are definitively committed to the expense at year-end and the amount can be reliably estimated
Keep a record of employment provisions paid out between 1 April and 2 June as that portion of the provision is deductible in the 31 March financial year, this includes holiday pay and bonuses
Repairs and Maintenance
A one-year warranty purchased with a fixed asset can be deducted as an expense rather than capitalised, provided the cost of the warranty can be separately identified
Review fixed asset registers to ensure genuine R&M has been expensed and not capitalised to fixed assets
The debt must be physically written off the debtors’ ledger by 31 March to be deductible
Retain documentation to support the debts as not recoverable
Claim the GST adjustment of any bad debt adjustment if you are on invoice basis
Cash donations paid to done organisations or registered Charities are deductible up to the level of net income. If the business is in a tax loss position, consider the owner making the donation and claiming the donation rebate.
Follow year-end cut off procedures to ensure sales, stock, expenses, etc, are accounted for in the correct year
The third instalment of 2023 provisional tax is due 7 May 2023 based on actual results to 31 March, therefore it is important to have your records in order to determine this if you are not paying based on standard uplift. Remember, the tax rate for individual’s income over $180,000 is now 39%.
If you have not yet filed your 2022 income tax return, please be aware there is now an extension of time to lodge until 31 May 2023. If we haven’t been in touch with your 2022 results we are certainly working towards getting them finalised in time and as soon as possible.
Ensure you have made any GST adjustments required from the preparation of 31 March 2022 financial statements
Ensure bank reconciliations are completed to financial year end and that all bank and loan balances in the accounting system match the bank statements that will be provided to your accountant
Confirm the balances of outstanding creditors and debtors are accurate
Where possible, lock your system at the year end to ensure no changes can be made once the final position has been determined
Year End 2023: Text
Year End 2023: Text
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