Our end of financial year guide for taxpayers

While the end of the financial year (EOFY) comes with a sense of burden for some (have a lot to do? Use our checklist!) it’s actually an exciting time for financial professionals and taxpayers alike.

With a helping hand from the ATO, EOFY brings a unique opportunity to optimise your financial position. As the end of June approaches, it's time to maximise your tax return and ensure compliance with tax regulations. Whether you are an individual taxpayer or a business owner, these tax tips will help you navigate the season effectively.

Understand & claim deductions.

Knowing which deductions you’re eligible for can significantly optimise your taxable income (ensure you keep all receipts and statements for any deductions claimed). Common deductions include:

• Work-related expenses: Uniforms, tools, and professional development courses.
• Home office expenses: If you work from home, you can claim expenses related to your home office (like a new laptop or WiFi charges).
• Investment expenses: Interest related to managing your investments.
• Charitable donations: Contributions to registered charities.
• Income protection insurance premiums: Premiums for insurance policies that protect your income.

Maximise contributions.

Super contributions.

Contributing to your superannuation is a tax-effective way to save for retirement. The guaranteed super rate increased to 11% of salary in the 2023 – 2024 financial year, with a maximum limit of $27,500. If you earn less than $250,000, consider topping up your super contributions to the maximum limit. For example, a personal contribution of $5,000 could potentially save you up to $1,700 in tax! A financial professional can assist with the numbers and check the annual contribution caps to avoid penalties.

Additionally, you may wish to consider unused catch-up contributions. If you have less than $500,000 in super and haven't fully used the concessional cap from previous years (since July 1, 2018) you may be eligible. This strategy is useful if you have other capital gains tax events, such as the sale of an investment property. Ensure you use the unused portion before the EOFY, or it will be lost forever. The easiest way to check your unused balance is through your myGov account.

Changes to the "bring forward rule" have widened the contributions age threshold from 67 to 75, with the work test no longer applied. This means senior Australians can boost their super balance with a lump sum contribution of up to $330,000, bringing forward three years' worth of $110,000 non-concessional contributions. This is applicable for balances less than $1.68 million, with a reducing amount for balances between $1.68m and $1.79m.

Downsizer contributions.

The "downsizer" contribution is another way seniors can access the wealth in their homes by contributing the proceeds to super. This applies to individuals aged 55 or older who sell their main residence and make a downsizer contribution of up to $300,000 (or $600,000 per couple). From January 1, 2023, the age threshold was reduced from 60 to 55, enabling more flexibility for those considering this option.

Review investment strategies.

EOFY is an excellent time to review your investment portfolio. Both property and shares have experienced healthy gains over the past few years, and it’s a good time to consider offsetting capital gains with losses from underperforming investments.

If you’ve sold an investment property or shares during the financial year and formed capital gains, consider selling underperforming investments to realise losses, which can offset these gains.

Claim small business breaks.

If you own a small business, ensure you’re aware of the specific tax concessions available, such as the instant asset write-off for new or second-hand assets or equipment (up to the $20,000 threshold).

If you’re in the market for an electric car, you’ll save on fringe benefits tax or eligible plug-in hybrid electric vehicles and associated expenses. The Electric Vehicle (EV) Discount allows 100% pre-tax payments on eligible EVs under the Luxury Car Tax threshold of $89,332.

Don’t tackle the challenges alone.

Tax laws are complex and constantly changing — we keep up with the changes so you don’t have to. Our tax professionals can ensure you’re maximising your deductions, complying with tax laws, and effectively planning for the future. Get in touch to get started.