EOFY YEAR Means: Tax Time is Coming...

Mums on a BUDGET
By Mums on a BUDGET
29 days ago
EOFY YEAR Means: Tax Time is Coming...

Please read below a fantastic post made by our Nationwide Facebook Group Accountant Expert.

"With EOFY coming up in just a few weeks, I thought I would share a reminder to look into some strategies to reduce your tax bill and maximise your tax refund.

1. Prepay expenses on or before 30 June 2024 to claim higher tax deduction in FY2024

Tax rates will be cut from 1 July 2024. The reduction in tax rates won’t affect anything for the FY2024 tax return. However, it is important to be aware that a tax-deductible expense incurred on or before 30 June 2024 provides a higher tax deduction than the same expense incurred on or after 1 July 2024.If your investment property requires some maintenance work, consider having the work completed and paid for before EOFY to maximise the value of your tax deduction.Example: Your annual taxable income is around $100K. This means your highest marginal tax rate 32.5% in FY2024 and 30% in FY2025. You plan attend a course in September 2024 and the course fees amount to $1000. You should consider pre-paying this expense in June 2024 as the tax deduction in FY2024 is worth $345 compared to $320 in FY2025.

2. Consider timing of selling investment property

If you are contemplating the sale of your investment property, consider delaying the listing until end of June 2024. Capital gains tax (CGT) liability arises when the contract is signed, not on settlement date. If contracts are exchanged before the EOFY, you will be liable for CGT in FY2024 at higher marginal tax rates.

3. Make non-concessional contribution of $1K to receive tax-free Government co-contribution of up to $500

If you earned an income of below $58,445 for FY2024 due to having taken maternity leave or leave without pay, you may be eligible for a Government co-contribution of up to $500 to your super fund if you make a personal non-concessional contribution of $1K to your super account.Note: Eligibility conditions apply: More than 10% of your income is from employment not investment income, have super balance of less than $1.9 m, have made less than $110K non-concessional contributions in FY2024 are not on a temporary visa and below age of 71.

4. Maximise spouse contribution tax offset

If your income is less than $37K per year and your partner earns significantly more than you, have a chat to him/her/them about making a spouse contribution of up to $3K to your super fund as he/she/they may be eligible for a tax offset of $540. A lower tax offset may be available if your spouse contributes less than $3K or your income is between $37K to $40K per year.This is a win-win strategy for both of you as it reduces your partner’s tax bill by up to $540 and boosts your retirement savings with non-concessional contributions (not taxable in super fund).

5. Make Concessional Super Contributions

If you’re on a high income and are in an enviable position with some cash to spare, consider making concessional super contributions to your super fund, which you can then claim as a tax deduction, provided you have submitted the Notice of Intent to Claim form to your super fund. Do note that this works only if you haven’t yet reached annual concessional contributions cap of $27.5K (which includes employer super contributions), as any amount over this cap will be taxed at highest marginal tax rate. If you didn’t contribute to the maximum limit during the last 4 years, you can utilise the un-used carry forward caps for the last 4 years and do a catch-up contribution this year.

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6. Get your paperwork ready for your tax return

To ensure that you don’t miss out on deductions for your upcoming FY2024 tax return, it’s time to get your paperwork ready, preferably scanned and saved in digital format as receipts do fade over time!(a) Keep copies of invoices/receipts/statements for:

· Tax-deductible donations made to charities or school building funds with Deductible Gift Recipient (DGR) status

· Work-related expenses & percentage of work-related use, eg. laptop/computer, printer, calculator or other equipment, briefcase/bag, etc.

· Work-related usage for electricity, gas, phone and internet, if you’re not using shortcut method of $0.67 /hour for home office expenses

· Self-education or continuing professional development eg. Courses, seminars, workshops, professional journals, magazines, books, etc.

· Professional memberships/subscriptions

· Union Fees· Uniform, occupation specific or protective clothing, laundry & dry cleaning expenses

· Overtime meals which are not reimbursed by your employer

· Expenditure incurred in earning interest, dividends or other investment income· Motor vehicle expenses if using logbook method, eg. Rego, fuel, insurance, servicing, repairs, etc.

· Expenses paid for investment property, eg. council rates, water bills, land tax assessment, body corporate fees/OC levies, repairs, etc.

(b) Prepare the following for your accountant:

· Car logbook which details work & personal usage,or log of actual distance travelled to claim deduction of $0.85/km

· log of hours worked at home (to claim for home office expenses at $0.67/hour)

You will also receive the following statements from 1 July 2024 onwards, which you should save handy for your accountant:

· Insurer’s statement listing premiums paid for Income Protection Cover· Private health insurance statement listing premiums & rebates received.

· Tax summaries for investments (eg. Shares, ETF, etc.) reflecting dividend income, capital gains, etc.

· Property Manager’s Annual Statement (for your investment property)

Feel free to get in touch directly with Geraldine via email to geraldine@glintaccountants.com.au, quoting ‘LOVEMOABA’ in your subject field!

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