The upcoming financial year brings a host of beneficial opportunities and important considerations for small businesses and individuals alike. This comprehensive tax planning guide outlines essential steps to navigate the end-of-financial-year landscape, ensuring both businesses and individuals make the most of available deductions and avoid potential pitfalls.

Small Businesses

Small business skills and training boost

Small businesses with an aggregated turnover of less than $50 million will be able to deduct an additional 20% of the expenditure incurred on certain types of expenditure in relation to external training for the year-ended 30 June 2024. Please check with your DFK BKM tax advisor if the training expenditure is eligible for the boost.

Other initiatives

• Consider prepaying rent, subscription and interest on loans before 30 June 2024. Prepayments are fully deductible for small businesses in the year it is incurred provided the service period is up to 12 months and it ends in the next financial year.
• If you are planning on purchasing a car, your deduction will be limited to $68,108 inclusive of GST. This applies to vehicles new or used.
• Review your invoicing with the possibility of postponing some of them until after the financial year.
• Review your debtors and write off any unrecoverable debts.
• Review your stock valuation and write off any stock that is damaged or obsolete.
• If bonuses are not paid by 30 June, in order for it to be deductible it needs to be substantiated and approved and staff notified of the bonuses.

Superannuation

• Concessional contributions need to be paid and must be in the superannuation fund bank account prior to 30 June 2024 in order to get the deduction
• To claim a deduction for personal super contributions, you must give your super fund a notice in the approved form and get an acknowledgement from the fund subject to eligibility criteria
• Please be aware that the superannuation guarantee amount is increased to 11.5% from 1 July 2024. Please also be aware that from 1 July 2022, the minimum monthly wage threshold of $450 was also removed. This means all eligible workers aged 18 years or older will be entitled to receive super contribution regardless of how much they earn.

Trust Resolutions

• Trustees of discretionary and family trusts must make valid distribution resolutions and minutes before 30 June 2024 to effectively distribute trust income to eligible beneficiaries for the year.
• The resolution must be made in accordance with the Trust Deed. If the Trust has not made a valid distribution by 30 June 2024, the Trustee may be liable to pay tax on the Trust’s taxable income at the highest marginal tax.

Individuals

Individual tax rates and thresholds will be changing from 1 July 2024 and the following table summarises the tax rates for Australian resident individuals from 1 July 2024:

Tax Rate	Taxable income up to 30 June 2024	Taxable income from 1 July 2024
0%	$0 – $18,200	$0 – $18,200
19%	$18,201 – $45,000	N/A
16%	N/A	$18,201 – $45,000
30%	N/A	$45,001 – $135,000
32.5%	$45,001 – $135,000	N/A
37%	$120,001 – $180,000	$135,001 – $190,000
45%	$180,001 and over	$190,001 and over

With the marginal tax rates reducing next year, individuals earning in excess of $18,201 will benefit from bringing forward their tax deductions to the 2023/24 income year.

If claiming a motor vehicle, two methods can be used:

• Cents per km
  • up to 5000 km
• Logbook
  • This method requires keeping a logbook for 12 continuous weeks

Home Office Expenses – 2 methods available:

• Fixed Rate
  • 67c per hour (This method covers all home office expenses)
  • Can also claim depreciation of assets like office furniture

• Actual Cost
  • Includes running expenses such as electricity & gas, phone & internet

If you have an investment property consider

• Bring forward any repairs prior to the end of the financial year
• Look at the possibility of having a depreciation report prepared
• Prepayment of interest on investment loans
• If an investment has been sold during the financial year, and resulted in a capital gain consider the sale of any investments that would result in a capital loss to offset the gain
• Point to note – Sale occurs when the contract is signed and not at settlement
• To take advantage of the potential 50% Capital Gains discount, the investments must have been held for at least 12 months

Catch up contributions

The Superannuation concessional contributions cap for the 30 June 2024 financial year is $27,500. From 1 July 2024 the contributions cap increases to $30,000. A concessional contribution Includes employer, salary sacrifice and personal member contributions.

• Carry-forward contributions rules that allow super fund members to use any of their unused concessional contributions cap on a rolling basis for five years.
• This means if you don’t use the full amount of your concessional contribution cap ($25,000 from 2019 to 2021, and $27,500 for 2022 and 2023), you may qualify to carry forward the unused amount up to five years later.
• Carry-forward contributions are calculated on a rolling basis over five years, but any amount not used after five years expires. These carry-forward rules only relate to concessional contributions into super.
• The total superannuation balance as at 30 June 2023 must be below $500,000
• Any catch-up contributions available for the 2019 financial year need to be used prior to 30 June 2024 otherwise they will be lost.
• Consider making additional personal member contributions prior to 30 June.

For further assistance, please contact your DFK Benjamin King Money representative.

The information provided does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances.