Michelle Bromley CFP®, Director & Private Client Adviser – Strategy and Advice
The end of the financial year (EOFY) is fast approaching, and with it comes the opportunity to optimise your position and set yourself up for a strong financial future. Here are my key considerations leading into 30 June.
1. Bring Forward Deductions
Consider prepaying 12 months of expenses incurred in the generation of taxable income such as income protection insurance premiums or investment loan interest before June 30th. This allows you to claim an immediate tax deduction for this financial year.
2. Supercharge Your Super (and Plan for the Future!)
If you haven't reached the concessional contribution cap ($27,500 for 2023-24), consider making a personal deductible super contribution before June 30th. This lowers your taxable income and boosts your retirement savings with tax-effective contributions.
3. Catch-up on concessional contributions
Check on my.gov.au what your carry-forward contribution entitlement is. If your super balance on 30 June 2023 was less than $500,000 and you’ve got the means and taxable income to offset with a larger deduction, you could make a larger concessional contribution above the standard concessional cap.
4. Review your salary sacrifice arrangements
It’s good practice to review your superannuation salary sacrifice each June, and more so this financial year because from 1 July 2024 the Superannuation Guarantee Rate is rising from 11.0% to 11.5%, and the concessional contributions cap is also increasing. Read our article outlining the contribution cap increases commencing from 1 July 2024.
5. Make larger after-tax contributions up to age 74
From 1 July 2022, individuals aged under 75 can make non-concessional contributions of up to 3 times the annual non-concessional cap limit using cash in the bank or other assets such as shares. The current non-concessional cap is $110,000pa or $330,000 if bringing forward an additional two years of contributions. As the non-concessional cap is calculated as 4 times the concessional cap, these limits will also increase from 1 July 2024.
6. Give your spouse a super boost
If your spouse is less than 75 and earns less than $37,000 you can make a spouse contribution of $3,000 and receive a tax offset of $540 yourself. Note that your spouse must not have already exceeded their non-concessional contributions cap and their total super at last 30 June must be less than the general transfer balance cap. The tax offset reduces if your spouse’s income is above $37,000 and cuts off at $40,000.
7. Lodge last years’ Tax Deduction Notice for personal super contributions and lodge your overdue return
If last year’s tax lodgement got away from you, don’t make the mistake of missing out on the tax deduction for personal contributions you made last financial year (i.e., 2022/23) because once 30 June ticks over, the opportunity is gone. The Deduction Notice needs to be lodged before the earlier of the date you lodge your tax return or 30 June of the year following the year when the contribution was made.
8. Collate your claimable receipts and other tax documents
Now is the time to start gathering your tax receipts for charitable donations, income protection premiums you’ve paid from your own pocket, work related expenses and other documents needed to substantiate earnings and tax deductions. You can even use your phone to scan and upload receipts into the ATO app in the ‘myDeductions’ section and sync with your tax record.
9. Pay yourself
Your accountant should be well on the way to completing your SMSF’s 2022/2023 Annual Return which is due by 15th May and should communicate to you any annual minimum pension requirements. Make sure you’ve drawn at least that amount out of your SMSF, otherwise you may not be considered to have remained in ‘pension phase’ and that could have tax consequences for your fund. Check out the minimum pension percentages on the ATO website at this link.
10. Personalised Guidance
Don't hesitate to leverage our expertise! We can provide personalised tax-effective financial planning strategies tailored to your individual circumstances. We'll help you navigate complex financial decisions and ensure you're on track to achieve your long-term financial goals, including maximising the benefits of the upcoming increase in super contribution caps.
The information in this article contains general advice and is provided by Primestock Securities Ltd AFSL 239180. That advice has been prepared without taking your personal objectives, financial situation or needs into account. Before acting on this general advice, you should consider the appropriateness of it having regard to your personal objectives, financial situation and needs. You should obtain and read the Product Disclosure Statement (PDS) before making any decision to acquire any financial product referred to in this article. Please refer to the FSG (www.primefinancial.com.au/fsg) for contact information and information about remuneration and associations with product issuers. This information should not be relied upon as a substitute for professional advice, and we encourage you to seek specific advice from your professional adviser before making a decision on the matters discussed in this article. Information in this article is current at the date of this article, and we have no obligation to update or revise it as a result of any change in events, circumstances or conditions upon which it is based.
