top of page

5 Things to Consider for Financial Year-End Planning in Australia


Calendar June 30 financial checklists

As we approach the end of the financial year on 30 June 2024, it's crucial to ensure you're making the most of the opportunities available to optimise your financial position. This is especially important regarding superannuation contributions, tax deductions, and investment reviews. Here are five key points to consider to help you prepare effectively.


1. Superannuation Contributions: Maximising the Concessional Contributions Cap


Superannuation is a powerful tool for building your retirement savings and taking full advantage of the concessional contributions cap can provide significant tax benefits. The concessional contributions cap for the 2023-2024 financial year is $27,500. These contributions are taxed at a lower rate of 15%, which can be advantageous compared to your marginal tax rate.


Why it Matters: Contributing up to the cap can reduce your taxable income, potentially lowering the amount of tax you owe. It also boosts your retirement savings in a tax-effective manner.


Superannuation Checklist:


  • Review your current super contributions to see how much more you can contribute before 30 June.

  • Consider salary sacrificing or making personal deductible contributions to maximise your cap.

  • Consult with your financial planner to ensure you're not exceeding the cap, as excess contributions may attract additional tax.


For more information, visit the ATO's guide on super contributions.



2. Tax Deductions: Tracking All Deductible Expenses


Ensuring you have tracked all deductible expenses is crucial for reducing your taxable income. Deductible expenses can include work-related, education, and certain health-related expenses.


Why it Matters: Every deductible expense you can legitimately claim reduces your taxable income, reducing the amount of tax you need to pay.


Tax Deduction Checklist:


  • Gather all receipts and documentation for work-related expenses, such as uniforms, tools, and travel costs.

  • Include expenses for self-education if they directly relate to your current job.

  • Check for any medical expenses that might be deductible.


Refer to the ATO's deductions guide for a detailed list of deductible expenses.


3. Investment Review: Aligning Strategy with Financial Year-End Planning


The end of the financial year is an ideal time to review your investment portfolio. Assess whether your current investments align with your financial goals and consider the tax implications of any changes you might need to make.


Why it Matters: An investment strategy that is misaligned with your financial goals can hinder your progress. Understanding the tax implications of buying or selling assets can help you make more informed decisions.


Action Steps:


  • Review your current investments to ensure they are performing as expected.

  • Consider rebalancing your portfolio to maintain your desired asset allocation.

  • Evaluate the tax impact of selling any investments, including capital gains tax.



4. Capital Gains Tax (CGT) Considerations


If you sold any assets during the financial year, it's important to calculate your capital gains tax (CGT). CGT applies to the profit from selling assets such as shares, property, and other investments.


Why it Matters: Properly calculating your CGT can prevent any surprises regarding your tax bill. Additionally, there are strategies to minimise CGT, such as offsetting gains with capital losses.


Capital Gains Tax Checklist:


  • Calculate any capital gains or losses from assets sold during the financial year.

  • Consider strategies such as holding assets for over 12 months to benefit from the CGT discount.

  • Use capital losses to offset any capital gains.


For detailed information, visit the ATO’s guide on CGT.


5. Reviewing and Updating Your Estate Plan


The end of the financial year is also a good time to review your estate plan to ensure it still reflects your current wishes and circumstances. This includes your will, any trusts, and your nominated beneficiaries for superannuation and insurance policies.


Why it Matters: An up-to-date estate plan ensures that your assets are distributed according to your wishes and can help to avoid legal complications for your heirs.


Estate Planning Checklist:


  • Review your will to ensure it reflects your current situation.

  • Check that your superannuation and insurance beneficiaries are up to date.

  • Consult with a legal professional to update any necessary documents.


For more information, see the Moneysmart guide to estate planning.


Conclusion


Preparing for the end of the financial year can be complex, but taking these steps can help you optimise your financial position. For personalised advice tailored to your unique situation, please contact our team of financial planners for a free 30-minute tax planning strategy session. We're here to help you navigate the complexities of financial planning and ensure you're making the most of your opportunities.


For more detailed information, visit the Australian Taxation Office website or consult with a qualified financial adviser.


By considering these five key areas, you can ensure that you're well-prepared for the end of the financial year and set yourself up for future financial success.

Comments


bottom of page