Australia End of Financial Year Planning Tips

With 30 June 2024 – end of the financial year (EOFY) fast approaching it is time to start turning your attention to some tax planning tips to minimise your 2024 tax liabilities.  The following list are just a few things to think about, if you need further information or assistance, please contact joanne@fairwaytax.com.au, your Fairway team is ready to help!

Bringing Forward Deductions – Rental Properties

If you have an investment property it is likely that you will have regular annual expenses for that property.  By prepaying expenses before 30 June 24 for costs relating to the 1 July 24 to 30 June 25 period (ie where the service will be provided in the next 12 months) you can claim the deduction in the 2024 income year, bringing forward the tax-deduction.

Note that ATO has specific conditions for prepaid expense deductions, if you are not sure, please do ask us.

Bringing Forward Deductions – Work-Related Expenses

If you have the cash available, you could also consider pre-paying your annual subscriptions for the 2025 income year for union fees, professional memberships, annual insurances or tax agent return preparation fees (or advice that will be delivered before 30 June 25) before 30 June 24 – so the deduction can be claimed in your 2024 return.

Superannuation

Many taxpayers will have carried-forward unused concessional contribution caps.  Making a contribution to superannuation before 30 June 24 (within the available caps and carry-forwards) and submitting the declaration form to your superannuation fund to treat it as concessional will enable the tax deduction to be claimed in your 2024 income tax return, reducing your tax liability for the year.  This can be particularly valuable if you have a significant bonus or transaction (eg a capital disposal) in the 2024 tax year which is pushing your income into a higher tax band than usual for the year.

If you are not sure what your available concessional cap amount is, please contact us and we will check for you.

Charitable Donations

If considering making a charitable donation for the 2024 income year, make sure:

• That the charity is registered with ATO as a Deductible Gift Recipient (the donation is only tax-deductible when this is the case)
• The contribution is made and received by the charity by 30 June 24
• You have a receipt from the charity for the donation

Medicare Levy Surcharge

If you don’t already have in place qualifying Australian Private Health insurance, covering you, your spouse and all dependents, you could (depending on the combined family income) be subject to the Medicare Levy Surcharge).  If you can get qualifying insurance in place by 1 July 24, then year ended 30 June 24 will be the last year you have to pay the surcharge.

Timing of Capital Disposals

If you are in the process of selling an asset that may be at a significant gain, it may be worth considering:

• Whether you have assets standing at a capital loss that you could crystallise in the same year as the gain (and thus reduce the Taxable Gain) or
• Whether you would be better to defer the disposal until next tax year (note with property it is the exchange of contracts date not settlement that is the date of the Capital Gains Event)

Small Business Asset Investment

The increased Small Business Instant Asset Write-Off – which allows small businesses to immediately deduct the cost of eligible assets costing up to $20,000 is for assets installed and in use between 1 July 23 and 30 June 24  has been extended to 30 June 25, so you do have a further year, but you may benefit from that tax-deduction in 2024, if new assets are acquired and in use by 30 June 24.  Note  – not all assets are eligible so check with us if unsure.

Checking the Records for your Car Expense Claims

ATO’s record-keeping requirements for claiming expense deductions get more extensive each year – now is a good time to ensure that:

• If you are using the log book method to claim Car Expenses – your log book is up to date or
• If using the cents per km method you have a record of work journeys

Checking the Records for your Home Office Expense Claims

For the 2024 income year we need a daily diary of working from home hours and copies of receipts/invoices for home running expenses (eg internet bills, electricity bills etc).  Now is a great time to double-check your records for the year are in order so we can maximise the claimable deductions for the year.

Being Prepared for Division 293

Clients are often surprised by Division 293 tax (for higher income-earners on their concessional superannuation contributions) even when it is a regular annual charge.  For clients who have had an exceptional year for income (eg a large bonus has been paid or a significant capital gain realised) this may push you above the $250,000 Division 293 threshold.  If you are concerned this might be you, please contact us so we can advise you on whether there is anything you can do before year-end to remain below the threshold or at least give you advance warning of the Division 293 liability.