End of Year tax tips – 2023/24 Financial Year
It is very important to separate end of financial year tax planning strategies with investment markets. After all you could still maximise a strategy to minimise tax and boost retirement savings and have the funds sitting in cash until you are ready to make an investment decision.
The end of the financial year is fast approaching with only 10 weeks before 30/06/2024. It is important you start thinking about possible strategies to ensure there is sufficient time for processing etc. While we are not Accountants, and this is general advice, we do have a list of strategies that we think are worthwhile considering.
Just remember these strategies may take some time to implement, so it’s good idea to start thinking about them now.
Here are our top year-end tips to get you started:
Tip #1 – Boost your super before 30 June
With the changes that came into effect as of 1 July 2017 you are now able to make a super contribution from a personal bank account and claim it as a tax deduction. If you do so it is critical that you complete a notice of intent (s290 form) to claim the tax deduction before you lodge your 2023/24 tax return, or a rollover occurs from your account.
It is important to speak to us if you are considering making any additional contributions as various contribution caps and rules apply. For example, the amount you can claim as a tax deduction, including your employer super contributions and possibly some insurance premiums, is $27,500 this financial year.
If your account balance is less than $500,000 you may also be eligible to make a “catch up” contribution for years where you haven’t made the maximum contribution. This can be especially useful in managing capital gains tax.
You can also make after tax contributions to super to boost retirement savings. This is $110,000 p.a. with opportunity to bring forward future years, i.e., 3 x $110,000 = $330,000.
Tip #2 - Top Up your spouse's super.
If you make an after-tax contribution of up to $3,000 to your spouse’s super by 30 June 2024, you could receive a tax offset of up to $540 if their income is less than $37,000 for the 2023/24 financial year.
Tip #3 - Prepaying investment interest could reduce this year's tax
If you prepay interest on a tax-deductible investment loan, you will be able to claim the interest paid in advance during this financial year. Not all banks offer this so it is best to check with your lender or finance specialist.
Tip #4 - Prepaying income protection premiums could reduce this year’s tax
Protecting your income is important as it ensures you can maintain your quality of life and provide support for your loved ones, if you are unable to work at your full capacity due to sickness or injury. Income Protection can provide a regular monthly benefit to cover mortgage payments and other expenses while you recover.
If you have, or are considering income protection insurance, you can prepay your premiums for up to 12 months. This may allow you to bring forward a tax deduction from the following year into the current year – potentially reducing your taxable income this financial year.
Tip #5 – Transferring your Life & TPD Insurance from your own name to super
In specific circumstances a 15% tax deduction on a Life and TPD insurance premium may be claimed if held or paid from a super fund.
If you are paying for Life and TPD insurance from a personal bank account this would be worth contacting us about.
Tip #6 - Small Business Owners Only
Pay tomorrow’s expenses today, including employee super contributions.
Please keep in mind these strategies are relevant for this financial year and some of the above strategies will vary for the next financial year. It may be appropriate to ask us for advice as to how some of these strategies may apply to you both in this financial year and future years.
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Churchlands WA 6018
