To assist with year-end tax planning, we have compiled a non-exhaustive checklist of matters that may require your attention before June 30, 2024
Determine whether you can decrease the amount of income derived in the 2024 income tax year by deferring derivation of assessable income to the 2025 income tax year. Note this is particularly important for 30 June 2024 as deferral into the 2025 income year means you are taxed at lower marginal rates so there are saving to be had here.
Determine whether you can increase the amount of deductions in the 2024 income tax year by bringing forward deductions from a later income tax year e.g. repairs, etc.
Ensure superannuation contributions have been received by your complying superannuation fund by 30 June 2024 (whether in cash or in-kind).
Note the superannuation guarantee rate is 11.0% for 30 June 2024. This will increase to 11.5% from 1 July 2024.
Please note in relation to motor vehicles, the car limit is $68,108 for 30 June 2024 (ex GST $61,916). It is $69,674 (ex GST $63,340) for 30 June 2025.
Instant Asset Write-off – while these measures are still not yet law – it is proposed that for businesses with an aggregated turnover of less than $10,000,000, eligible assets costing less than $20,000 may be immediately written off, provided that they are first installed and ready for use by 30 June 2024. This measure is planned to continue into up to 30 June 2025 – and is not limited to one asset and can be used for as many items under $20,000 as you wish.
Trust distributions to children over 18
The ATO has been reviewing and making changes to the requirements in relation to distributions of trust income to adult children. This is so particularly where the parents are the ones that gain the economic benefit of the income and the children are unlikely to receive their entitlements. This is considered a reimbursement agreement that the ATO wants to stamp out.
It does not apply to arrangements entered in the course of ordinary family or commercial dealings. Evidence to demonstrate that a beneficiary has received or enjoyed the benefit of their entitlement or evidence as to how the beneficiary wishes to apply their entitlement is required
Contributions to Superannuation for 30 June 2024.
Contributions must be made before 30 June 2024 to receive a tax deduction for 30 June 2024.
Concessional contributions
For the year ended 30 June 2024, regardless of age, you can only contribute $27,500 into superannuation from all sources. Note that for 30 June 2025 this amount increases to $30,000. For clients with balances under $500,000 you may be eligible to catch up on prior years' unused contributions.
Non-concessional contributions
These contributions were previously referred to as “undeducted contributions” or after-tax contributions. The superannuation fund does not pay tax on these contributions.
For 30 June 2024, non-concessional contributions of $110,000 per person (or $330,000 in three years up to the age of 75) may be made. For 30 June 2024, this is increased to $120,000 (or $360,000 in a three-year period.
Note that non-concessional contributions cannot be made once your pension balance cap reaches $1,900,000 ($1,900,000 again for 30 June 2025).
There are transitional bring-forward limits depending upon your total superannuation balance as of 30 June 2023 and these are as follows:
Less than $1,680,000 $330,000 3-year period
$1,660,000 to $1,779,999 $220,000 2-year period
$1,780,000 to $1,899,999 $110,000
From 30 June 2025 these will change as follows:
Less than $1,660,000 $360,000 3-year period
$1,660,000 to $1,779,999 $240,000 2-year period
$1,780,000 to $1,899,999 $120,000
Pension payments
For clients currently drawing a pension, ensure that you have made your minimum pension payments before 30 June. For the 2024 financial year, there is no discount on the minimum payment, and the minimums are based on your 30 June 2023 balances.
For those who are reaching retirement and are considering starting a pension, speak to one of our consultants about the tax implications or financial considerations you may need to take into account.
Maximize Your Tax Savings Today
Every client’s experience will vary, so please feel free to contact us. Wishing you all the best for a successful and healthy financial year 2024/25!
