EOFY 2024
The following list is not exhaustive, but rather is designed to prompt you to take positive action. If you want to talk about any of these points, please don’t hesitate to call or email us so we can help you out.
I’ve expanded on some key areas to consider at this time might include:
Maximising super contributions without exceeding the relevant caps – this involves consideration of both concessional (or pre-tax) contributions and non-concessional (or after tax) contributions. There’s ongoing opportunity for some to use ‘catch up concessional contributions’ if you had cap-space unused in prior financial years, so long as your total super balance is under $500,000. This is great to beat down your personal taxable income and therefore tax payable, especially if you got a pay-rise, a bonus at work, or sold an investment for a gain. Note these caps climb from 01/07/2024 to $30,000 for concessional contributions, and $110,000 for non-concessional contributions.
We enjoy that there’s now more flexibility on how to make your super contributions concessional via Personal Deductible Contributions (PDCs) too, so this may be enormously beneficial to save you some personal tax and boost your super at the same time.
There’s a potentially free hit of up to $500 for those earning under about $43,445 per year (phasing out by $58,445), thanks to the government co-contribution, and there’s a spouse tax offset of up to $540 available if your spouse earns under about $37,000 and you contribute $3,000 to their super.
Who doesn’t like free money, or tax savings? If this appeals to you, please ask us about it.
The end of Financial year falls on a Sunday, and we recommend any contributions you wish to make are done by no later than Friday the 14th of June! Mark it in the calendar now!
Some more EOFY options to consider:
Bringing forward deductible expenses – this includes things like premiums for income protection policies, interest on investment loans and super payments that your business has to pay anyway. Bringing deductions forward helps with the ‘bird in hand factor’ – money today is always worth more than money tomorrow.
Deferring taxable income – essentially this makes sense if you can reduce how much tax you can pay by earning income over two tax years instead of in one. You’d need to be sure it doesn’t amplify a ‘next year income tax problem,’ as well as considering the value of money in hand. This may determine decisions like when you sell an investment, get a termination offer, or whether you take your long service leave over two years instead of one.
Maximising deductions and available concessions – otherwise you’re leaving money on the table. A proactive tax agent can save you lots of money. If you’re not sure what’s deductible and what’s not, we like the ATO’s guidance, which you can find here, especially if you find the guide specific to your occupation or industry.
Managing capital gains – a lot of this also hinges in timing. Some of our clients choose to sell investments the year after they retire, or in a year their taxable income is lower due to maternity leave.
Managing pension minimums – for many of our retiree or income stream clients, the last couple of financial years have had changes that halved the minimum pension percentage draw requirement, but this is no longer the case since 1/07/2023 they have returned to normal age-based percentages.
