As the end of the financial year approaches, it’s essential to get your financial planning in order. Here are some tips to help you make the most of this financial year and prepare for the next.
1. Super Contributions
Super Contributions: If you haven’t considered your super contributions for the financial year yet, now is the time. Don’t wait until the last minute to make your contributions.
Timing of Super Contributions: The timing of super contributions is crucial. Contributions count towards the relevant cap in the financial year they are “made” or “allocated” to your account.
Concessional Contributions: These include employer contributions, salary sacrifice, and personal contributions claimed as a tax deduction. The cap for 2023/24 is $27,500, but it will increase to $30,000 from July 1, 2024.
Non-Concessional Contributions: The cap for 2023/24 is $110,000. If your total super balance (TSB) on June 30, 2023, is $1.9 million or more, your cap for 2023/24 is nil.
Government Co-Contribution: If your income is below $58,445 in 2023/24, consider making a non-concessional contribution to receive a government co-contribution of up to $500.
2. Spouse Contributions
Tax Offset: If you make spouse contributions and your spouse’s income is less than $40,000, you may be eligible for a tax offset of up to $540.
Contribution Splitting: Splitting concessional contributions with a spouse can equalize super balances, access tax-free super sooner, and reduce your total super balance.
First Home Super Saver Scheme: Consider making eligible contributions of up to $15,000 per financial year to take advantage of the scheme.
3. Income Streams
Minimum Pension Payments: Ensure you have taken the minimum pension payment from retirement phase income streams before July 1.
Transition to Retirement Income Streams: Review your pension to ensure the appropriate amount is taken before June 30.
4. Self-Managed Super Funds (SMSFs)
Investment Strategies: Review and document your fund’s investment strategy.
In-House Assets: Ensure the level of in-house assets does not exceed 5% of total assets as of June 30.
5. Social Security
Gifting: Consider making gifts before July 1 to utilize the gifting limit of $10,000 per financial year.
6. Taxation
Tax-Deductible Expenses: Maximize your tax deductions by prepaying eligible expenses like interest on investment loans, income protection insurance premiums, and business expenses.
Capital Gains Tax Management: Conduct a portfolio review to offset gains and losses, but avoid wash sales.
7. Ceasing Employment
Timing: Consider the timing of your employment termination and receipt of termination payments to take advantage of lower tax rates or higher tax-free components.
8. Upcoming Changes
Paid Parental Leave Scheme: The scheme will become more generous for children born or adopted on or after July 1, 2024.
Preservation Age Increase: The preservation age will increase to 60 starting from July 1, 2024.
Deeming Rates: The current freeze on deeming rates will end on June 30, 2024.
9. Other Matters
Review Insurance and Expenses: Compare insurance cover and other expenses to see if better deals are available.
State-Based Payments and Rebates: Check if any state-based payments, rebates, concessions, or vouchers are available or due to expire.
By planning ahead and making strategic decisions, you can maximize your benefits and set yourself up for a successful new financial year.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
