Unlocking Tax Savings Before June 30th: Are You Prepared?

As 30 June quickly approaches, I encourage you to pause for a minute and contemplate the following questions:

  • Do you know where your forecast tax position lies for the year to date?

  • Have you given any consideration to the must do action items pre-30 June?

  • What strategic actions can you implement pre 30 June to maximise your tax position?

  • Have you considered your cashflow position before implementing any strategies?

Business Owners:

We aren’t big fans of spending money just to get a tax deduction (remember you only get a percentage of it back). We believe cashflow is the most important consideration for businesses planning. However, there will likely be some expenditure that you will have to incur across the next 12 week period, so it is worth considering paying them before 30 June to ensure you get the tax deduction this financial year:

  • Employee Superannuation is only deductible when it is paid. Payment for the June quarter superannuation is required by law to be paid by 28 July 2025, so consider paying the majority of your employees superannuation before 30 June to claim the tax deduction this year.

  • Capital assets you are likely going to need to purchase in the coming months. For example a new work trailer or computer. Any assets purchased and installed ready for use before 30 June costing less than $20,000 can potentially be immediately claimed as tax deduction.

  • Consideration to whether or not you are lodging on a cash or accruals basis for your business income tax. If you lodge on a cash, consider paying all your supplier invoices pre 30 June to get the tax deduction for them. TIP: Consider paying your supplier invoices using a business credit card to help with cashflow

  • Consider your group structure – if your group average tax rate higher than 25% then it is worth considering if you are structured correctly

  • Determining profit distributions to stakeholders and understand the tax implications for the underlying stakeholder

  • Personal concessional superannuation contributions for business owners may be deductible, again these must be paid pre 30 June

  • Ensure that compliant Trustee Distributions have been prepared and signed pre 30 June to avoid a trustee assessment and paying tax at top marginal rate. Please see the below ATO resource to assist with complying resolutions:

    https://www.ato.gov.au/businesses-and-organisations/trusts/in-detail/trust-tax-time-toolkit/resolutions-checklist

Individuals

Tax planning isn’t just for business owners, some strategic actions can be implemented for individuals to maximise their tax position leading into 30 June.

  • Donations, do you have a charity that you would like to support? Consider making any donations pre 30 June to claim a tax deduction. Donations to a deductible gift recipient of $2 or more are tax deductible.

  • Did you work from home during the year? – you may be eligible to claim a deduction for working from home. There a two different options to claim a deduction for working from home:

1.     Fixed Rate Method – you can claim $0.70 for every hour worked at home.

2.    Actually Expense Method – you can claim the additional costs you incurred as a result of working from home. You           must keep written evidence and records to substantiate the claim.

Please see the below link for the ATO’s guidance on claiming home office deductions:

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/working-from-home-expenses

  • Personal concessional superannuation contributions – have you considered making a tax deductible contribution into your superannuation fund? For example if you earn $160,000 per year and you make a $10,000 contribution into your superannuation fund before 30 June you would save $3,7000 in personal income tax when you lodge your tax return.

  • You can claim a deduction for any self-education expenses you incurred that relate to your work.

  • Income protection insurance – premiums paid to protect your one of your main assets, your salary are often tax deductible.

Record Keeping

As ATO scrutiny continues to increase, we encourage you to review the ATO guidance on their website and ensure that you comply with their record keeping requirements when considering the above tax planning options.

Get the right advice

If you are a business owner or individual and you aren’t booked in with your Accountant for a pre 30 June Tax Planning session or you would like a seconded opinion, please get in touch with the IWP Team and we can help you pro-actively plan not only for this 30 June but help align your tax strategies to your long term goals and objectives.

 

 

General Advice Warning

The information in this article is general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. You should seek independent financial advice to discuss your personal circumstances.

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