11/06/2023
With EOFY 2023 knocking on our doorsteps, let us share some tax tips you may consider to minimise your tax liability this tax season and to be compliant with Australian Taxation Office.
1. Temporary full expensing
Eligible businesses can claim an immediate tax deduction for the full business portion of the cost of an eligible asset purchased and first used by 30 June 2023. If you are an eligible business and are looking to buy business assets, consider buying before 30 June 2023 to be able to claim full deduction in the 2023 tax return. Losses incurred due to temporary full expensing for a corporate tax entity may be eligible for a loss carry back and possible refundable tax offset.
2. Prepayment of expenses
If you are estimating a higher taxable income for 2023FY and reasonably lower taxable income in the next financial year, consider making prepayments (for the next 12 months) before 30 June 2023 and lower your overall tax liability.
3. Trust distribution resolution
Trustees of a discretionary family trust are required to prepare and execute distribution resolution for the trust prior to 30 June each year.
4. Minimum pension withdrawal for SMSF
If you have an SMSF and you are on pension phase, make sure you comply with the minimum pension payment requirement before 30 June 2023. Your minimum pension amount is determined by your age and minimum pension payment %.
5. Charitable Donation
Donations made over $2 to registered charities are tax deductible. Make your donations prior to 30 June 2023 to be able to claim deduction in your 2023 tax return.
6. Concessional Super Contribution $27,500
Consider topping up your concessional super contribution for the year up to $27,500 and claim a tax deduction in your personal tax return. Make sure that total concessional contributions (Employer + Personal) do not exceed the annual cap of $27,500 as this may result in additional tax liability.
7. Govt Co Contribution $500
If you earn less than $57,016 and 10% or more of your income is from employment, consider making personal non-concessional contribution and receive up to $500 Government Co-Contribution.
8. Timing of Selling assets
If you are selling assets prior to the end of the financial year, consider selling the assets making profit and assets making losses in the same financial year rather than asset making loss in a separate financial year. The losses can be offset against the gain from selling capital assets if they incur in the same year.
If you are expecting a lower taxable income in the next financial year, consider deferring any sale of profit-making assets to next year to potentially pay overall lower tax.
9. Keep Records of your deduction claims
This tax time, ATO will have a greater focus on claims particularly around work related expenses, rental property deductions and CGT reporting. Make sure you keep all records properly to avoid ATO Audits and potential penalties.
Disclaimer: The above tax tips are general information only and should not be considered as personal tax or financial advice. You may consider contacting BST Accounting-Chartered Accountant for specific taxation advice best suitable to your circumstances.
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