How to Get the Most Out of Tax Planning FY25

We have summarised things you can consider when reviewing your tax situation:

1. Maximising Your Tax Savings - Identify key deductions and strategies to minimise your tax

2. Compliance Ready – Have a clear plan to meet compliance requirements such as robust record keeping & substantiation. Now is the time to ensure that your substantiation documentation is in order. Questions to ask yourself include:

•  Do you have a legible receipt? 

•  Have you completed a logbook for your motor vehicle?

•  Is your travel diary and home office diary prepared and ATO compliant?

3. Timing - Set up required structures before 30 June and minimise the impact of any Capital Gains. 

4. Gain a Strategic Advantage - Get clear on your tax position so you can make informed financial decisions and plan for future growth. 

5. Peace of mind & Clarity - Early preparation and organisation during tax planning will help with the preparation of your FY25 Financial Statements & Tax Returns and ease the pressure of lodgement deadlines.

Tax Time Planning Tips

Below is a summary of a handful of general tax planning tips:

• Prepaying Expenses - (up to 12 months) can be paid before 30 June 2025. These can include items such as rent, interest on business loans or rental properties, insurances, and more.

• Defer Income – delay issuing invoices where practical.

• Write-off - bad debts & obsolete stock.

• Assets available for immediate write-off - Taxpayers will still be able to claim assets in full up to the threshold of $20,000.  

• Stock - ensure a stocktake is done on 30 June or as close to 30 June as you can to confirm correct amount on hand.

• Distribute income to achieve the best tax outcome.

o Trust Distribution Minute: Make sure it’s prepared prior to 30 June.

• Boost your retirement nest egg - Catch up Concessional Contributions, Downsizer Contributions and Reserving Strategy for Self-Managed Super Funds (SMSF).

• Employees' Super - Pay employees’ super before 30 June to receive the tax deduction in this financial year.

Boost your Retirement Nest Egg and get a Tax Deduction:

Last Chance - 30 June 2025 is your final chance to utilise any unused concessional cap from the year ended 30 June 2020.

If your Super balance is under $500,000 at 30 June 2024, you may be eligible to catch up contributions you have missed over the previous 5 financial years starting 2019/20.  It is based on a rolling 5-year basis, so this is the last year 2019/20 will be available.

☑️ Maximum you can add: $30,000 for this year + any unused amount from the past 5 years.

☑️ Why it's good: Lower taxes! Contributions get taxed at 15% inside super, potentially saving you money. Unless you earn over $250,000 then you will pay an additional 15% tax on top.

*Seek financial planning advice to ensure this is right for you.

Medicare Levy Surcharge (MLS) can be an unexpected tax hit if you do not have an appropriate hospital cover.

We’ve had a handful of clients get caught by Medicare levy surcharge, specifically when:

-          Only one spouse is covered or

-          Where clients change Insurance provider mid-way through the tax year and/or

-          Do not have appropriate cover for the entire 365 days.

Furthermore, we typically see this when one spouse earns significantly higher income than the other or when new couples are unaware of each other’s private health insurance coverage for the entire year. If you want to avoid paying Medicare Levy Surcharge, the whole family (including De-Facto) are required to have an appropriate hospital cover including your dependents.

Lodgement Cycle.

How frequently do you pay GST + PAYGW + Super? If on a quarterly basis look at moving to monthly to help with your cashflow. Note: from 1 July 2026 super will payable at the same time as employees’ salary and wages are paid.

Don’t forget!

To ensure a smooth tax planning process with your accountant, ensure the following:

👉 Reconcile your Xero file up until the end of the last month.

👉 Think about how your business will perform in the months through to 30 June.

👉 Let your Accountant know if you are planning a major purchase in the next 12 months (this could be a car, a home, an investment property, etc).

👉 Review your debtor's list (people who owe you money) for any old debts that are unlikely to be paid.

👉 Other expenses directly related to earning my income, like licenses, training courses, stationery, etc. You will need to keep receipts and written records to substantiate these.

👉 Don’t forget to declare all income and gains from Cryptocurrency, Airbnb, Ride Share etc and ensure that your expenses claimed are directly connected to earning that income.

DISCLAIMER:

This information is for general awareness only and does not constitute tax and financial advice.  Please consult a qualified professional for specific guidance.