Not in Business? What Tax Planning Should You Be Doing Prior to 30 June?

At Kreston Stanley Williamson, we emphasise that tax planning is a year-round activity, but June is the time to double check that any critical actions are taken before 30 June.  As we approach the end of the financial year, we thought it is worth reminding you of things that need to be attended to, before the new financial year rolls around.

Importantly, beginning on 1 July 2024, there are large tax cuts for individual taxpayers. As the tax cuts apply to the next income year, real tax savings are available if you can delay taxable income to next year, either by deferring income or capital gains to next year, or by bringing forward tax deductions to this year. 

The items listed below will help you to find possible methods to achieve this.

1. For individuals, are there deductible expenses you know you have to pay soon that you could pay before 30 June to get a tax deduction this year?  Examples of such deductible expenses might be income protection insurance, donations, or perhaps rates, strata levies and insurance for investment property owners.
2. Review your capital gains tax position for the year and take appropriate action.  If you have made gains, do you have any unrealised losses you could crystallise before year end to reduce the tax impact? Please discuss plans with us before actioning.
3. The fixed rate allowed by the ATO for claiming work from home expenses continues at 67c per hour. This fixed rate is provided to make it easy to work out your claim and it is to include home and mobile internet, mobile and home phone, electricity and gas and stationery and consumables. You can separately claim work related technology and office furniture or depreciation. If you have large home office expenses it may mean that the actual cost method is more attractive.  If you work from home, you should ensure that you have records available to assess the best way to claim your expenses. See details of work from home claims.
4. If you have an investment loan, talk to the lender about whether you can prepay up to 12 months of interest on the loan.  While this strategy is only timing, it will decrease your tax for this year and defer it until next year. This may be especially important if your income in the 2025 financial year is likely to be lower than this 2024 financial year. Additionally, tax rates are decreasing from 1 July so there may be a permanent saving as well. See the new tax rates effective from 1 July.
5. As an employee, you are able to claim super contributions made personally, even if your employer makes contributions for you as well. Review whether you make a contribution before 30 June up to your maximum total allowed of $27,500 (including contributions made by your employer). Please make sure that you do not go over the maximum as adverse tax ramifications are then imposed on the excessive amount. Please note this maximum increases to $30,000 from 1 July 2024.
6. Additional concessional superannuation contributions can be made by utilising any unused concessional contributions caps on a 5-year rolling basis, as long as your Total Super Balance was less than $500,000 on the 30 June just before the start of that financial year. This means you could catch up your contributions if you did not take advantage of the limit in past years.
7. If you are looking to make a donation to a charity it would be better off in your 2024 tax return so plan to make the donation now. Also ensure that the organisation you plan to donate to has Deductible Gift Recipient status.  If in doubt, check the recipient’s status here.
8. If you wish to change structure of your investments or you are planning to go into business, 1 July is the easiest and cheapest time to start or adjust to the new structure.
9. Have you got your income producing assets in the correct name to minimise tax? Is the income being taxed at the lowest possible rate?
10. Do you need to review or adjust your salary packaging before 30 June to utilise all concessions that may be available to you?
11. Do you hold cryptocurrency or something similar? Do you hold this cryptocurrency on revenue or capital account? Please speak to your Client Manager if you are in any doubt about how your investment returns should be treated. The ATO is looking very closely at this area at the moment.

The above lists should remind you of any areas you may have forgotten. Please feel free to contact us should you wish to clarify something or discuss your individual circumstances.

Author: Michael Goodrick

*Correct as of 19 June 2024

*Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.