Jun 21, 2024 Matthew Hung
Year End Tax Tips
As we near the end of another financial year, here are some quick tax tips to help you finish 2024 well.
For Individuals
Top up your Superannuation concessional (tax deductible) contribution
The concessional contributions cap for the year ended 30 June 2024 is $27,500. Depending on your circumstances, this allows you to contribute a bit extra into your super on a before-tax basis, potentially reducing your taxable income. If you have any unused concessional contribution amounts from previous financial years and your super balance is less than $500,000, you may be able to “carry forward” these amounts to further top up your super in the 2024 financial year. Remember that your fund must receive your contribution before 30th June for it to count for this financial year.
Realise any capital losses
If you have capital gains (e.g. from selling property or shares), consider selling investments with unrealised losses so that the gain and the loss fall in the same tax year. Again, these need to be genuine transactions to be effective for tax purposes.
Bring forward expenses
Consider paying for work related items (such as memberships, equipment with a cost up to $300, business car repairs, etc) prior to 30th June to claim a tax deduction in this financial year. Consider bringing forward any tax deductible donations to this financial year.
Defer Income
Consider deferring income wherever possible, to the next financial year, especially if you are anticipating a lower level of income going forward.
Investment property owners
If you do not have one already, a depreciation schedule is a report that helps you calculate and claim deductions for the natural wear and tear over time on your investment property. Depending on your property, it might help to maximise your deductions.
For Businesses
Obsolete plant & equipment
If your business has obsolete plant and equipment sitting on your depreciation schedule, instead of depreciating a small amount each year, scrap it and write it off before 30 June.
Bonuses and Directors fees
If it makes sense to do so, bring forward tax deductions by committing to directors’ fees and employee bonuses (by resolution), and paying June quarter super contributions in June.
Skills and training boost
The ‘skills and training boost’ is available to businesses with an aggregated annual turnover of less than $50 million and provides a bonus 20% deduction for eligible expenditure on certain external training provided to your employees. To claim the boost, the training needs to have been provided by a registered training provider and registered and paid for between 29 March 2022 and 30 June 2024. Typically, this is vocational training to learn a trade, or courses that count towards a qualification rather than professional development.
Instant Asset write-off
Announced in the 2023-24 Federal Budget, the increase to the instant asset write-off threshold enables small businesses with an aggregated turnover of less than $10 million to immediately deduct the full cost of eligible depreciating assets costing less than $20,000. In the 2024-25 Federal Budget, the Government extended this measure to 30 June 2025, however these measures are still not yet law.
Write-off bad debts
To be a bad debt, you need to have brought the income to account as assessable income and given up all attempts to recover the debt. It needs to be written off your debtors’ ledger by 30 June. If you don’t maintain a debtors’ ledger, a minute confirming the write-off is a good idea.
Pay June quarter employee super contributions now
You need to physically pay June quarter super contributions this financial year if you want to claim a tax deduction in the current year. The next quarterly superannuation guarantee payment is due on 28 July 2024, however some employers choose to make the payment early to bring forward the tax deduction instead of waiting another 12 months.
Don’t forget yourself. Superannuation can be a great way to get tax relief and still build your personal wealth. Your personal or employer sponsored contributions need to be received by the fund before 30 June to be deductible. Remember that the key date is the date the Fund receives the money not the date it leaves your account.
Bring forward repairs, consumables, trade gifts or donations
To claim a deduction for the 2024 financial year, consider paying for any required repairs, replenishing consumable supplies, trade gifts or donations before 30 June.
Realise any capital losses and reduce gains
Neutralise the tax effect of any capital gains you have made during the year by realising any capital losses – that is, sell the asset and lock in the capital loss. These need to be genuine transactions to be effective for tax purposes.
Trust Distribution Resolutions by June 30
Trust Distribution resolutions are required to be signed prior to June 30 or as otherwise required by your Trust Deed. In most cases we will assist you with these. If you are distributing to new beneficiaries, you need to quote their Tax File Number to the ATO by 31st July 2024.
We are always here to help so please contact us.
If you have any questions or other matters you wish to discuss please don’t hesitate to contact us on 9878 1477, or email us at contact@rdlaccountants.com.au
