Tax Tip #6: Write off bad debts

Most of the time, an invoice that has not been paid in the past 12 months are likely to never be paid, so when all means of collecting an outstanding payment have been exhausted, it's time to write off the bad debts.

This will allow you to claim back your GST credits, reducing your potential tax liability. However, the debt will need to be accounted for as assessable income in the previous reporting period and the write-off has had to occur before the end of the previous financial year.

For more information on how to claim GST credits, visit the ATO website >>

Watch this space for another tax tip tomorrow as part of D&B's daily Tax Tips series, which will run during the month of June.

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