2024 Tax Time Tips

*The information contained in this article is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

Everybody has their own story. Everyone’s situation is different, so other people’s choices and outcomes will be different to yours. Consider your circumstances before deciding what’s right for you.

You should consider seeking independent legal, financial, taxation or other advice to check how the information contained in this article relates to your own unique circumstances.*

‍

Record keeping is key

Ahead of tax time, it is worth reviewing the ATO’s requirements for record keeping to ensure that your business is meeting it’s obligations.

·        You must have records to prove expenses

·        You must have spent the money yourself, and not been reimbursed

·        Expenses must be related to your business activities

‍

If you have employees – stay on top of super obligations

Superannuation must be lodged and paid by the due dates to ensure it can be claimed as a tax deduction for your business. The ATO have a good rundown for checking your super obligations here.

It is also important to be aware that the Super Guarantee (SG) rate you pay employees is increasing on 1^st July 2024 to 11.5%.

‍

Instant Asset Write-off

* Please note that at the time of writing, this legislation is still yet to be passed by Parliament *  

The $20,000 instant asset write off is set to be extended, and will remain in place for the 2025 financial year. This means that small businesses with turnover less than $10 million can claim a full tax deduction upfront for purchases up to $20,000 – rather than claiming a portion of the tax deduction over a number of years. 

*It is important to note that the $20,000 is not cash back in your pocket ie. you need to be making a profit in order for this to be beneficial. We recommend seeking professional accounting advice to determine whether this tax measure is appropriate for your business.

‍

Home based business

If you work from home, there are some expenses you may be able to claim a deduction for. In the 2024 financial year, this can be claimed using the “Revised Fixed Rate Method”, which is $0.67 per work hour and includes most expenses. However, you must be recording the number of actual hours you work from home during the entire income year to be able to claim this method.

You may also wish to use the "Actual Cost" method, which requires you to keep every receipt throughout the year to calculate the specific cost of expenses incurred.  

Whichever method applies to you, remember to keep complete and accurate records, for at least 5 years, so you can substantiate your claims.  

You can find further information at the ATO here.

‍

Car expenses

If you utilise a car for your work/business, ensure that you have kept an accurate Motor Vehicle Logbook for a 12-week consecutive period & have kept a copy of all your related expense receipts (fuel, registration, insurance etc). A completed logbook is generally valid for 5 years, so long as your circumstances don’t change.

If you do not have a valid logbook, an alternative method is to claim up to 5,000km using the cents per kilometre method.

‍

Consider making a tax-deductible personal super contribution

If you have funds available, you may wish to consider making a personal contribution into your super fund. Not only will this boost your future retirement savings, but it can be utilised as a tax deduction in your income tax return. For the contribution to be eligible as a tax deduction, you must:

·        ensure that the total amount (including contributions made by your employer) is no more than $27,500

·        ensure the payment is received by your super fund by June 30^th2024. Contact your super fund for payment cutoff dates

·        let your superfund know about your intent to claim the deduction by lodging a Notice of Intent form & then receive written acknowledgement in return, prior to lodging your tax return. You can contact your super fund, financial advisor or accountant if you need assistance in lodging this paperwork.

‍

Government co-contributions to super

If you earned $43,445 or less in 2024, with at least 10% of your income coming from employment or business income, you may be eligible to make a non-concessional contribution to your superfund of $1,000 and receive a $500 co-contribution from the Government.

If you earned between $43,445 - $58,445 and/or make an eligible contribution less than $1,000, a lower co-contribution will be received from the Government.

‍

Salary sacrifice to super

If your annual income is $45,000 or higher, salary sacrifice can be a worthwhile strategy to boost your retirement savings and pay less tax – particularly for employees nearing retirement age.  

‍

If you own an investment property – obtain a property depreciation report

Prepared by a Quantity Surveyor, a property depreciation report may allow you to claim depreciation and capital works deduction on the property & capital items within the property.

This can result in big tax savings, which generally outweigh the cost of having the report completed within the first year.

‍

If you have investments – you can prepay expenses and interest

Expenses relating to investments such as property or shares can be prepaid before 30^th June 2024, with a full tax deduction claimed this financial year. For example, if you have an investment property, you may consider prepaying the full 12 months of interest before 30^thJune, so that you can claim this amount as a deduction in your 2024 income tax return.

‍

Consider income protection insurance

Income protection is generally tax deductible, and may be worth considering for both the tax benefit and peace of mind it can offer you and your family should something prevent you from working in the future. It can also be pre-paid for the year ahead, meaning if it is paid in full before 30^thJune 2024, you can claim the full deduction in your 2024 tax return.

‍

Don’t rush to complete your individual tax return

The ATO recommends holding off until at least late-July to get your individual tax return sorted. This is because information such as bank interest, private health insurance and dividend income often isn’t reported to the ATO until later in July. That means that if you lodge early, you risk leaving important information out of your tax return and will therefore need to lodge an amendment later on.

‍

‍

‍