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Tax Planning for Individuals – What to do prior to 30 June?

Tax Planning for Individuals – What to do prior to 30 June?

Tax planning is a year round activity at Stanley Williamson Kreston, but June is the time to double check that any critical actions are taken before 30 June.  We’ve spoken to lots of clients throughout the year and especially over the last few weeks about actions to take for their individual circumstances. Despite this, and as we approach the end of the year, we thought it worth reminding you of things that need to be attended to, before the new financial year rolls around.

  1. Review your capital gains tax position for the year and take appropriate action.  If you’ve 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.
  2. 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 might be income protection insurance, donations, or perhaps rates, strata levies and insurance for investment property owners.
  3. Now there are more people working from home, there are some standard rates of deductions available for the period you were at home. Do you know what these rates are? If not, please contact us. Please note, these rates provide a shortcut method to calculate your claim. This shortcut method ceases at 30 June 2022.
  4. Since 1 July 2017, as an employee, you are now 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).
  5. 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.
  6. 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 2023 financial year is likely to be lower than this 2022 financial year.
  7. 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.
  8. Have you got your income producing assets in the correct name to minimise tax? Is the income being taxed at the lowest possible rate?
  9. Do you need to review or adjust your salary packaging before 30 June to utilise any and all concessions that may be available to you?
  10. Has there been any residency issues during the year where, due to COVID you have been stuck in a country that is not your usual place of residence? If so, please talk to us about the effect on your tax affairs, both here and overseas.
  11. Do you hold cryptocurrency or something similar? Do you hold this cryptocurrency on revenue or capital account? The ATO believes there is a large under reporting of cryptocurrency transactions. If relevant to you, be prepared for some questions from the ATO, if you are no dealing with it correctly.

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

Author – Michael Goodrick

*Correct as of 30 May 2022

*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to 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 contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.

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