With 30 June fast approaching, it is now a good time to consider a few of the things below that will have an impact on your compliance and tax position for the year.
With 30 June fast approaching, it is now a good time to consider a few of the things below that will have an impact on your compliance and tax position for the year. A common EOFY strategy is to make some last-minute work expenses in June, so you can claim them as tax deductions in July. As good as it may sound, but it also means spending money when you really don't need to, which is rarely a sensible plan.
If you are an Individual Taxpayer
1. Personal Tax Rates
The personal tax rates remain as previously announced for the 2023-24 year as follows:
- 0 to $18,200 — Nil
- $18,201 to $45,000 — 19 cents for each $1 over $18,200
- $45,001 to $120,000 — $5,092 plus 32.5 cents for each $1 over $45,000
- $120,001 to $180,000 — $29,467 plus 37 cents for each $1 over $120,000
- $180,001 and over — $51,667 plus 45 cents for each $1 over $180,000
2. Low- and Middle-Income Tax Offset
The low- and-middle-income tax offset has not been extended past 30 June 2022. From 1 July 2022 you may be eligible for the low income tax offset only, if you earn up to $66,667.
3. Consider Additional Super Contribution up to the Cap
Both employees and self-employed individuals can claim a tax deduction for the Financial Year 2023 to a maximum of $27,500 for personal superannuation contributions. If the super contributions made by your employer on your behalf is under the $27,500 limit, if cashflow permits, you can make additional contributions up to the cap and claim the deduction for FY23.
4. Report Income from All Sources
Please note that you will need to report income from sources such as your Salary or Wage, Government Payments, Online/Sharing/Gig Economy Income, Crypto and Share Capital Gains and Losses, Interest Income, Rental Income, and Foreign Income in your tax returns.
5. Work Related Expenses
Ensure you keep a record of all the work-related expenses. Taxpayers who are over-claiming work-related expenses are on ATO's hit list again this year.
6. Elimination of $250 Self-Education Expense Threshold
As of 1 July 2022, the first $250 of self-education expense, which was previously non-deductible, has now been removed and is deductible.
7. Working From Home
The revised rate method applies from 1 July 2022. You can claim a deduction of 67 cents for each hour you work from home. From 1 March 2023, taxpayers are required to maintain a record of the total number of hours in which they worked from home.
8. Rental/Investment Properties
If you own one or more rental/investment properties, it is important to start assembling relevant documents such as statements and invoices/receipts for your 2023 tax return.
For Businesses
1. Payroll & STP
All employers are now required to run their payroll through accounting and payroll software that is Single Touch Payroll (STP) ready. Employers should ensure their STP year-end finalisation reports are lodged by 14th July 2022.
2. Pay June Quarter Super by 30 June
In order for small business owners to claim the tax deduction on super contributions made on behalf of employees, the super has to be paid before 30 June.
3. Write-off any Bad Debts
Review your debtors and write off any unrecoverable debts.
4. Trust Resolution
Prior to 30 June every year, the trustees of discretionary trusts are required to make and document their resolutions on how the income from the trust is distributed to its beneficiaries.
5. Business Health Checks
The end of the financial year is a good time to review how your business is performing and possible areas for improvement.
Please note that the information provided above is general only and does not constitute personal financial advice.