With only a few weeks remaining in the financial year, it is time to review whether there are any opportunities worth considering before 30 June.
Some end of financial year (EOFY) strategies can take time to implement, particularly where processing times, contribution deadlines or purchase lead times are involved. If you have been meaning to review your position, now is the time to have a conversation with your adviser.
Here are four things to consider before the financial year ends.
-
Bringing Forward Deductible Expenses
Depending on your circumstances, bringing forward certain expenses before 30 June may assist with your overall tax planning.
For investors, this may include prepaying investment loan interest where permitted by your lender. In some cases, this can create a deduction opportunity, although the benefits will depend on your personal circumstances and income position.
Business owners may also wish to review any planned expenditure before year end.
Eligible small business entities with aggregated turnover below $10 million may be able to immediately deduct the cost of eligible assets under $20,000 for the income years ending 30 June 2025 and 30 June 2026.
As eligibility requirements can be complex, it is important to seek advice before making purchasing decisions.
-
Reviewing Personal Super Contributions
EOFY can also provide an opportunity to review your superannuation position.
Making personal deductible contributions may help reduce taxable income while boosting retirement savings. However, contribution caps and eligibility rules apply, and contribution processing times should also be considered.
If you are considering making additional contributions this financial year, leaving it until the final days of June may create unnecessary pressure. Starting the process now can help ensure contributions are received before the relevant deadlines.
This can be particularly relevant for clients who have experienced a higher income year, sold assets or are looking to strengthen their long-term wealth position.
-
Considering Charitable Giving
For clients planning charitable donations, ensuring contributions are made before 30 June may allow them to be claimed as a deduction this financial year.
To generally qualify, donations must:
- Be $2 or more;
- Be made to an organisation with Deductible Gift Recipient (DGR) status;
- Be completed before 30 June; and
- Not provide a material benefit in return.
For those already planning to support charitable organisations, now is a good time to finalise those arrangements.
-
Have You Gathered Your Records and Receipts?
EOFY preparation is often easier when records are organised before the rush of tax time.
Taking some time now to gather receipts, invoices and supporting documents can help streamline the preparation of your tax return and reduce the likelihood of missing legitimate deductions.
Business owners may wish to review:
- Outstanding invoices and expenses;
- Motor vehicle and logbook records;
- Work-related expense receipts;
- Charitable donation records;
- Investment income statements; and
- Private health insurance and other relevant tax documents.
If you use accounting software, now can also be a good opportunity to ensure transactions are up to date and accounts have been reconciled.
A little preparation before 30 June can make the lodgement process smoother and help ensure nothing is overlooked.
Planning Ahead
While some EOFY opportunities become more limited as 30 June approaches, there are still practical steps that can be taken before the year ends.
Whether it is reviewing deductions, making contributions or simply getting your records organised, taking action now can help set you up for a smoother tax time.
If there are actions you have been considering before 30 June, we encourage you to speak with your adviser sooner rather than later. Please contact us on 03 9840 2200.