Deferring income

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  • Income received in advance of services to be provided will generally not be assessable until the services are provided.
  • Taxpayers who provide professional services may consider, in consultation with their clients, rendering accounts after 30 June to defer the income.
  • A taxpayer is required to calculate the balancing adjustment amount resulting from the disposal of a depreciating asset. If the disposal of an asset will result in assessable income, a taxpayer may want to consider postponing the disposal to the following income year.
  • Consider whether the criteria for classification as a small business entity are satisfied to access various tax concessions such as the simpler depreciation rules and the simpler trading stock rules.
  • Individuals operating personal services businesses should ensure that they satisfy the relevant test to be excluded from the personal services income regime, or seek a determination from the Commissioner.

Michael Quinn