Key Tax Considerations for this 30 June
As we approach end of financial year, it's time to review your tax planning strategies and ensure everything is in order before 30 June.
From the temporary full expensing and loss carry back coming to an end, to increases in employee’s guaranteed super.
PLANNING STEPS BEFORE 30 JUNE
INDIVIDUALS
Capital Gains - Review and consider selling any underperforming investments prior to 30 June, to realise a loss which can be used to reduce your overall capital gain position.
Deductions - Consider bringing forward deductible expenses prior to 30 June to maximise allowable deductions, including:
- Making any personal super contributions (up to available limits) prior to 30 June. More information Super Contribution Strategies.
- Bringing forward any deductible expenses. More information Tax Tips for Individuals.
BUSINESSES
Defer Income - Consider delaying the issuance of invoices until after 30 June, if possible & appropriate. This strategy can be beneficial for work in progress, interim invoices.
Bad Debts - Review your outstanding debts and write off any old or uncollectible amounts before 30 June. Make sure you have made genuine attempts to recover these debts.
Inventory - Perform a stocktake before 30 June and write off any obsolete, expired, or unusable stock. This will help reduce your stock on hand figure.
Superannuation - To claim a tax deduction in 2023 for employees' super contributions, ensure payments are made & received by the fund on or before 30 June. More information Super Guarantee rises in July to 11%.
Trust Resolutions - Ensure compliance with trust deed and corporate trustee constitution requirements. Take into account the implications of the Owies decision and the ATO guidance on reimbursement agreements. More information Tax Tips for Trusts.
Division 7A Matters - Consider transactions involving companies and associated entities to avoid deemed dividends. Make minimum yearly repayments for Division 7A loans from prior years before 30 June. Declare dividends if necessary to facilitate min repayments.
Concessions Coming to an End
Temporary Full Expensing: The immediate deduction for eligible depreciating assets under the Temporary Full Expensing concession ends on 30 June. SME’s will have access to an immediate deduction limited to assets costing less than $20,000 from 1 July. More information Temporary Full Expensing coming to an end.
Loss carry back for Corporate Tax Entities: Subject to eligibility criteria, corporate tax entities can carry back tax losses from the 2022-23 income year to the four prior years (as far back as the 2018-19 income year) and claim a refundable tax offset.
Other Areas of Focus
Rental Properties and Holiday Homes: ATO Focus on Rental Properties: The ATO has identified rental properties and holiday homes as areas of particular focus this 30 June. Ensure accurate reporting of all rental income from various sources. More information ATO focus on rental properties.
Interest on Loans: Ensure interest on loans related to rental properties is fully deductible by complying with conditions such as genuine availability for rent, appropriate rental charges, and proper apportionment of loan interest for private expenses.
Working from Home Deductions: Updated Guidance on Working from Home Expenses: The ATO has provided guidance on an accepted method for calculating deductions for working from home expenses. From 1 July 2022, taxpayers can claim a revised fixed rate of 67 cents per hour if certain conditions are met. More information Changes to Working From Home Deductions.
