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As we head into the final few weeks of this financial year, tax is the hot topic. Our Tax team is here to help with some tips and insights to help you make smart tax decisions as the financial year wraps up and the new one begins. Here they are:
If you’re a small business owner, now’s the perfect time to claim an immediate deduction for certain prepaid business expenses. These expenses include those with payments covering a period of 12 months or less (with the payment period finishing before the end of the next financial year). The most common expenses that you should consider prepaying by 30 June 2024 include lease payments, interest, rent, business travel, insurance and business subscriptions.
Here are some important things to know to help you hit the ground running from day one in the new financial year:
1) Be aware that the personal contributions limit to super is increasing. Super remains the most tax-effective investment vehicle. The current limit is $27,500 but this will increase to $30,000 from 1 July 2024. If you’re a 5WM client, this should be accounted for in your plan where possible.
2) There are changes coming to tax rates and thresholds from 1 July to be aware of:
a. The 19 per cent tax rate will reduce to 16 per cent
b. The 32.5 per cent tax rate will reduce to 30 per cent
c. The threshold above which the 37 per cent tax rate applies will increase from $120,000 to $135,000
d. The threshold above which the 45 per cent tax rate applies will increase from $180,000 to $190,000
3) Don’t forget that donations over $2 are tax deductible when paid to a deductible gift recipient (DGR).
4) Keep all your receipts! Keeping track of receipts is essential for accurately filing taxes and maximising your deductions. This is an area many of us could improve in – but if you properly organise and store your receipts from now, you’ll thank yourself when it’s time to lodge your return.
For more tips and suggestions on how to make the most tax-effective decisions for your circumstances and goals, contact our friendly Advisory and Tax team (02) 9739 6555.
Please note, the above information does not constitute financial advice and does not take into account your current circumstances or goals. Please speak with a Financial Adviser before acting on any information found here or throughout the 5 Financial website.