As we approach the end of another financial year, you should now take some time to consider tax and accounting strategies that can be put into place before year end to minimise or defer some tax burden.
Read on for some tips and strategies that may put you in a better tax position. Taking the time to do some tax planning may result in a better outcome in your 2024 tax return and start the new tax year on the front foot.
We recommend that forecasts of your future tax bills are prepared so that you do not get any “surprises” when you lodge your 2024 tax return. Particularly if your business is growing or if you have started a new business.
Tax Tips
– Ensure your accounting records and bookkeeping are all up to date as at 30 June 2024.
– Ensure you have documentation (eg. receipts) to support each transaction.
– Defer the receipt of income (hold off invoicing where possible until after 30 June 2023).
– Accelerate legitimate deductions by bringing them forward by 30 June 2024.
– Small businesses can claim an upfront deduction for prepaid expenses (in certain circumstances) instead of spreading it over multiple tax years. Consider prepaying business expenses that relate to a 12-month period or less on or by 30 June 2024.
– If you have received any income in advance (where the good or service has not been provided yet), you may be able to defer the taxing of the income to the 2025 tax year (instead of 2024 tax year).
– Write off any bad debts. To claim a deduction for bad debts, the debtor must have been “written off” in your accounting ledger on or before 30 June 2024. A good business practice is to review this regularly and not just at year end.
– To claim a deduction for employee superannuation, this must be paid before 30 June 2024.
– To claim a deduction for employee bonuses, the bonuses must be committed to or communicated to the employees on or before 30 June 2024.
– Conduct a year end stocktake and review stock on hand to determine if any stock needs to be scrapped or written off by 30 June 2024.
– Review your payroll records and perform year end reconciliations. Be prepared for year-end Single Touch Payroll reporting for employees by the ATO due dates.
– Donations to Deductible Gift Recipients should be made on or before 30 June 2024 to claim a tax deduction in your 2023 tax return.
– Ensure the minimum Division 7A loan repayments are made by 30 June 2024 and place any applicable Division 7A loans under loan agreements.
– Reconcile petty cash / float balances to the accounting records.
– Ensure your motor vehicle logbook is current and up to date. If you do not have a current logbook, you will need to start a new logbook for 12 weeks. This can be used for 5 years.
– Declare and pay any company dividends to shareholders by 30 June 2024. Minutes and dividend statements should be prepared and issued.
– Trustees are required to determine the distribution of income to beneficiaries on or by 30 June 2024 in writing (the relevant date is dependent on the trust deed).
– Unpaid present entitlements (UPE) in trusts should be reviewed and any action required taken by 30 June 2024.
– Consider if you require any private health (hospital) insurance particularly if you are close to or over the Medicare Levy Surcharge income thresholds (Singles: $93,000 threshold, Family: $186,000 threshold). Hospital insurance needs to be taken out from 1 July to avoid the Medicare Levy Surcharge for the full year.
– Working From Home (WFH) deductions – the record keeping requirements and methods for calculating WFH deductions has changed. More information on what you need to do to make WFH claims can be found on our blog here.
– You may be able to make general concessional superannuation contributions that can be claimed as a deduction in your tax return. These are subject to requirements and annual limits. You should seek financial advice.
– If you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap and make additional concessional contributions for any unused amounts. You should seek financial advice.
– The corporate tax rate for “base rate entities” for the 2024 tax year sits at 25%. For companies that are not “base rate entities”, the corporate tax rate is 30%.
– Include all assessable income received in your tax return. These include super released under other compassionate grounds and income from all employers.
– Small Business Instant Asset Write-Off allows an immediate deduction for new and second-hand eligible depreciating assets and the balance of a small business pool. Aggregated turnover and eligibility criteria apply. The asset must cost $30,000 or less and first used between 1 July 2023 to 30 June 2024. The legislation is awaiting Royal Assent at the time of writing.
– Small Business Skills and Training Boost – extra 20% bonus deduction may be claimed on training courses at eligible registered training organisations. This ends on 30 June 2024. More information can be found on our blog here.
– Small Business Energy Incentive – extra 20% bonus deduction capped at $20,000 may be claimed on costs that supports electrification and more efficient use of energy. This ends on 30 June 2024. More information can be found on our blog here.
– Not-for-profits – changes to annual reporting. The 2021-22 Federal Budget announced reforms to reporting requirements for not-for-profit organisations that self-assess as an income tax exempt charity. From 1 July 2023, non-charitable NFP are required to lodge an annual self-review return (conditions apply). Exemptions include a government entity or a charity registered with the Australian Charities and Not-for-profits Commission (ACNC) and taxable NFP organisations. More information can be found on our blog here.
Talk to us about booking in a tax-planning session
We’ll always do our utmost to help you plan out your tax liabilities.
Book a tax-planning conversation with us and let’s start improving your strategy.
The team at EMspire Advisory are trusted, qualified Chartered Accountants and work closely with our clients to achieve the best possible outcomes. So to find out more and assist with your tax planning, please contact us!
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.