With the end of the financial year approaching, now is the time to review your tax strategy. Proper planning can help maximise deductions and avoid common pitfalls. Here’s what you need to know.
Opportunities to Maximise Your Tax Position
Boost Your Superannuation Contributions
If your super balance allows, consider making a deductible personal contribution before 30 June. You may also be able to use unused concessional caps from the past five years if your balance is under $500,000. Age and work test rules apply, and contributions to a low-income spouse may also attract a tax offset.
Claim Charitable Donations
Donations over $2 to registered deductible gift recipients (DGRs) are tax-deductible. The benefit depends on your tax rate. Consider options like public or private ancillary funds for philanthropic giving, which can offer immediate deductions while managing donations over time.
Maximise Investment Property Deductions
A current depreciation schedule can help you claim deductions on your rental property’s wear and tear, potentially boosting your tax savings.
Business Write-Offs and Timing
Write off bad debts and obsolete plant and equipment before EOFY to claim immediate deductions. Companies may bring forward deductions by paying directors’ fees, bonuses, and super contributions within the financial year.
ATO Risks and Areas of Increased Scrutiny
Work-From-Home Expenses
You can claim expenses using a shortcut rate of 70 cents per hour or actual costs with records. The ATO requires detailed logs of hours worked from home, so keep good records.
Rental Property Claims
Expenses must relate to income-earning periods. The ATO scrutinises loan interest claims on refinanced loans, repairs versus capital improvements, and correct income and expense sharing for co-owned properties.
Gig Economy Income
All income from platforms like Uber, Airbnb, and YouTube must be declared. New reporting rules enable the ATO to match platform data with tax returns, so undisclosed income risks penalties.
Tax Debt and Lodgement
Failing to lodge returns on time leads to automatic assessments and debt escalation. If you’re struggling, Walker Hill Group can help negotiate with the ATO.
Professional Services Firms
The ATO is reviewing income flows in professions to prevent income diversion and ensure fair remuneration aligns with services provided.
Final Thoughts
Effective tax planning now can save you money and reduce risk. If you’d like expert advice tailored to your situation, contact our team on 07 3367 3155 or support@walkerhill.com.au for personalised guidance this EOFY.
