As the end of the financial year approaches, it’s a great time to review your financial position and take advantage of relevant EOFY tax tips. Below are some key tax planning strategies and considerations to help you and your business make the most of available opportunities before 30 June.
1. $20,000 Instant Asset Write-Off – Small businesses with an annual turnover of less than $10million can continue to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 (GST exclusive). To qualify:
- The asset must be first used or installed and ready for use by 30 June 2025.
- Both new and second-hand assets are eligible (e.g., tools, machinery, office equipment, vehicles).
This can be a valuable tax saving strategy for businesses looking to invest before year-end.
2. Making Superannuation Contributions Before 30 June – Contributing to your super before year-end can reduce your tax and grow your retirement savings. Consider the following tax tips – whether you’re an employee, self-employed, or managing a business.
Concessional Contributions (Pre-Tax) – The concessional cap for 2024–25 is $30,000. Contributions made towards this cap include:
- Employer Super Guarantee (SG) contributions
- Salary sacrifice contributions
- Personal contributions claimed as a tax deduction
If you have any unused cap, you can make a personal contribution and claim a deduction in your tax return.
Carry-Forward Concessional Contributions – If your total super balance was under $500,000 on 30 June 2024, you may be eligible to use unused concessional caps from the past five years. This is an effective way to save money on taxes if:
- Your income is higher this year
- You sold an asset and want to offset capital gains
- You’re self-employed or had irregular income in recent years
Non-Concessional Contributions (After-Tax) – The cap is $120,000 per year.
If under age 75 and with a total super balance below $1.9 million, you may bring forward up to three years’ worth — contributing up to $360,000 at once.
Government Co-Contribution – If you earn under $60,400 and make a non-concessional contribution of up to $1,000, the government may contribute up to $500 to your super.
Spouse Contributions – You may receive a tax offset of up to $540 if you contribute to your spouse’s super and they earn less than $40,000.
Downsizer Contributions – If aged 55 or over, you may be able to contribute up to $300,000 (per person) from the proceeds of selling your home. This does not count towards your other contribution caps.
IMPORTANT: Ensure contributions are received by your super fund before 30 June. Delays (from you or your fund) can cause missed deductions.
3. Minimum Pension Drawdown for SMSFs – If you’re a member of a self-managed super fund (SMSF) receiving an account-based pension that started on or after 20 September 2007, a minimum annual payment must be made by 30 June.
- The amount is based on your 1 July 2024 pension balance and age-based percentage.
- If the pension commenced during 2024–25, the minimum is calculated on a pro-rata basis.
Failure to make the minimum payment may result in adverse tax consequences for the member.
If you’re unsure of your minimum pension amount, please contact us — we can help.
4. Paying your Employee’s Superannuation before 30 June – Pay your employees’ June quarter super by 30 June to ensure you can claim the tax deduction in this financial year.
5. Pay Your Creditors – If your business reports on a cash basis, consider paying as many creditors as financially possible before 30 June. This ensures you can claim the deduction in FY25.
6. Defer Invoicing – If your cash flow allows, consider deferring some June invoicing until July to reduce income in the current year.
7. Write Off Bad Debts – Review your outstanding debtors and write off any amounts you believe are uncollectable before 30 June. This ensures you don’t pay tax on income you won’t receive.
Book a Tax Planning Meeting – We dedicate June to meeting with clients for tailored tax planning advice. If we haven’t already contacted you and you’d like to schedule a session, please get in touch as soon as possible so we can help you implement the best tax planning strategies for your circumstances.
If you have any questions about these strategies please do not hesitate to reach out to us on enquiries@chcpas.com.au or (03) 9431 1420. We appreciate your trust in our services and look forward to continuing to support you.
