Tax Time Planning
Super Contributions
For employers, Superannuation Guarantee of 11% of OTE must be paid on time and be received by the superfund before 30 June 2024 to be tax deductible in the 2024 year.
You may also be able make personal super contributions provided you are eligible.
The maximum concessional contribution for 2024 is $27,500.
You should also check if you have any unused concessional contributions from previous years that you could make catch up concessional contributions for if eligible. Unused contributions from 2018-2019 will expire on 30 June 2024.
You must submit a Notice of Intent to your Super Fund to claim a tax deduction for personal contributions and receive an acknowledgement from your fund. If you are over 67 you need to meet the work test if you wish to claim personal super contributions.
Please ensure if you are going to make contributions in the month of June they are processed before the 25th June 2024.
As of 1 July 2024 the superannuation guarantee (SG) rate will increase to 11.5%.
The superannuation concessional cap will increase from $27,500 for 2024 to $30,000 in 2025.
Skills and Training Boost – Bonus 20% Deduction for Eligible External Training
This boost is available to businesses with aggregated turnover of less than $50m who provide eligible training to employees between 29 March 2022 and 30 June 2024. This boost allows you to claim an additional 20% deduction of your training expenses.
Review Your Debtors and Creditors and Plant and Equipment
Before end of year is a good time to review your debtors and creditors for any write offs or unrecoverable/bad debts.
You should also review your asset register for any obsolete plant and equipment that may be able to written off before 30 June 2024.
Stocktake & Log Books
Make sure you have documented what stock you have on hand at end of financial year. You can review your valuation (lower of cost or net realisable value) and write off any stock that is damaged or obsolete. Its also a good time to check you have your log books complete and ready for tax time.
Prepay Expenses
Small Business entities can claim an immediate deduction for prepaid expenditure if the payment is incurred for a service period that is not exceeding 12 months. This can be things like rent, insurance, subscriptions, directors fees, bonuses, etc.
Investments
Selling Investments – such as shares, property, managed funds can have significant implications on tax. You need to consider the timing of the sale as this determines when the tax falls due. If there is a contract of sale, the event happens when you enter into and sign the contract, not the settlement date. The signing date is used to determine eligibility for the 50% discount if you have held the investment for more than 12 months. Any gain on your investment becomes taxable income and is taxed at your marginal tax rate.
Unfortunately legislation hasn’t been passed as law yet in regards to the Instant Asset Write Off Extension or the Energy Incentive Additional 20% Deduction.
You can read more in our newsletter and we will inform you when more information is available.
Tips to help You Prepare for Tax Time:
- Gather all your documents in one place – List all income including income statements, rental income, interest, dividends, crypto currency, etc. List all expenses including work related expenses, log books, donations, self education, income protection insurance, private health insurance, etc.
- Every profession has a list of occupation-specific tax deductions. From car expenses and uniforms to mobile phone bills and union fees, chances are there are work-related expenses you can claim. Think about anything you have purchased that relates to your job or helps you do a better job. It could be equipment you use on the job or a subscription to an industry publication. If the expense relates directly to your job and your employer did not reimburse you, you may be eligible to claim it.
- Home Office Expenses- There are 2 methods available using the ATO fixed rate of 67 cents per hour worked from home or the actual cost method. Accurate records should be maintained.
- Consider private health insurance – individuals and families on income above certain thresholds (Base tier $93,000 or $186,000 for family for 2024) will be liable to pay the Medicare Levy surcharge, an additional 2% tax on adjusted taxable income unless you have an appropriate level of hospital cover for the full tax year to avoid the surcharge.
Make Use of ATO & Tax Resources Including:
Deductions you can claim
https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim?=Redirected_URL
myDeductions App
https://www.ato.gov.au/online-services/online-services-for-individuals-and-sole-traders/ato-app
myTax online lodgement for simple tax returns
https://www.ato.gov.au/individuals-and-families/your-tax-return/how-to-lodge-your-tax-return/lodge-your-tax-return-online-with-mytax
ATO Tools and calculators
https://www.ato.gov.au/calculators-and-tools
End of Financial Year Checklists
https://business.gov.au/finance/yearly-financial-tasks/end-of-financial-year-checklist
Koinly ; Crypto trading reports
https://koinly.io/au/
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