As we approach the end of another financial year, it’s time to review your financial strategies to maximize tax savings and secure your long-term financial well-being. To help you navigate this process effectively, we’ve compiled a comprehensive checklist of key considerations to leverage before 30th June 2024.
Given the uniqueness of each individual’s financial situation, we strongly advise consulting a licensed financial adviser who can provide tailored advice on the most suitable end of financial year strategies for your circumstances.
1. Boost Your Super Savings
- Personal Super Deductible Contributions: You may claim a tax deduction for personal contributions made to your super fund, up to the annual concessional contribution cap of $27,500* (2023/24). This can reduce your taxable income and enhance your retirement savings.
- Government Co-contributions: Low or middle-income earners making personal super contributions may receive a government co-contribution of up to $500.
- Salary Sacrifice Arrangements: An agreement with your employer to give up part of your salary (thereby reducing your taxable income) and investing it into super to boost your retirement savings.
- Spouse Contributions: A tax rebate (up to $540) is available for after-tax contributions to super on behalf of a low-income spouse.
*Note: Your cap may be higher if you have unused concessional contribution cap amounts carried forward from previous years. Read this article to learn more.
2. Superannuation Considerations
- Timing: Ensure contributions are in your super account before 30 June to count towards this financial year’s limits.
- Work Test Exemption: If aged between 67-74, you can make non-concessional and salary sacrifice contributions without satisfying the work test.
- Notice of Intent: Provide a valid ‘notice of intent to claim a deduction for personal superannuation contributions’ to your super fund to claim deductions for personal contributions.
3. Other Superannuation Considerations
- Super Splitting: Consider splitting part of your annual concessional contributions with your partner to even out super balances.
- Notice of Assessment: Submit a notice of intent to claim a tax deduction/variation for 2022/23 contributions by 30th June 2024.
5. Maximizing Centrelink Entitlements
- Utilize allowable Centrelink gifting limits before June 30 to potentially increase your age pension entitlements. Centrelink allow gifting which is not assessed for age pension purposes provided they are in line with specific gifting limits. This is limited to $10,000 per financial year and $30,000 over a five financial year rolling period.
6. Managing Tax and Expenses
The following will effectively bring forward your tax deduction into the current year and could help offset any capital gains or additional income you’ve earned.
- Income Protection Insurance: Income protection insurance is typically tax deductible. Explore prepaying premiums for up to 12 months in advance.
- Pre-pay Interest: Some lenders allow prepayment of 12 months’ interest on income-producing loans for geared asset like a rental property or geared investment portfolio.
Planning for the Future
Ask yourself these questions and assess your financial situation:
- Do you expect anything to change in the next 12 months?
- Did you get a tax refund that you could use to grow your wealth or pay down other debts?
- Should you have put more money aside to pay your tax liability?
The good news is, we have an End of Financial Year every year, so you can always apply any lessons learned. Seek professional advice and consult a financial adviser, accountant, or tax agent to plan ahead and maximize tax efficiency. Start planning now for a financially secure future. Contact us if you need any guidance or assistance.
