EOFY 2023-2024

20 June 2024

Ways to get ready for tax time

The end of the financial year on 30 June 2024 is fast approaching, so here’s a quick checklist to help you prepare in advance and maximise your tax time benefits.

Understand your sources of income

Income can come from all sorts of areas.

Interest earned from bank accounts
Dividends received from shares
Employee share options
Capital gains received from the sale of an asset
Rental income from an investment property
Redundancy payments
Any taxable Centrelink payments

Deductions

Undoubtedly, it is the most contentious area of tax returns. This could include expenses incurred and not reimbursed, which may reduce tax liability. Some common deductions are:

Work-related expenses
Home office expenses
Self-education and professional development
Registrations, subscriptions, memberships
Vehicle and travel expenses
Protective clothing, laundry and dry-cleaning expenses
Tools and equipment, including depreciable assets (such as laptops)
Accountant or tax agent fees
Personal super contributions
Investment income expenses
Income protection insurance premiums

Offset capital gains against capital losses

Disposal of shares or any other form of investment may cause capital gain. You may consider disposing of any assets you know are trading at a loss. The resulting capital losses can be offset against the capital gain. Don’t forget the upcoming tax changes may mean that from 1 July, you’re paying less tax, which might affect when you decide to divest any investments and incur a capital gain – this year or next.

Also, be careful if you sell shares at a loss and buy them back in the new tax year. The ATO takes a hard line against so-called “wash sales”. This refers to the sale of an asset before the year-end and the purchase of a substantially identical asset immediately after the year-end. The ATO regard the purchase and the sale as effectively the same asset and has issued a Tax Ruling, which states that they can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties.

Document your donations

It’s great to give to your charity of choice, but don’t forget your potential tax deductions. So, hang on to your receipts and record your donations. Ensure that the charity is a deductible gift recipient.

Understand the Medicare levy

If you earn over a certain amount, you must pay the 2% Medicare levy to help fund the private health system. But there’s a potential rebate available if you are a high income earner and take out private health insurance. So, you might want to work out your best approach, particularly if you have earned more than last year.

Get your retirement income right

If you’re retired, the good news is you can earn a higher income level before you start paying taxes. But it can depend on your age and the type of income you receive, so it’s a good idea to get across all the rules with your accountant.

Get your investment property affairs in order

If you’re renting a property out, you’ll probably be aware that there are plenty of tax deductions you can claim for things like depreciation, the cost of repair and maintenance, interest costs on your loan and fees that you pay for a real estate agent to manage your property. As usual, the rules can (and do) change, so check all the latest expenses you can claim here.

Home Office

If you are employed but work from home, occasionally or all the time, you are entitled to deductions for costs arising from working at home. The expenses that you can claim include:

Heating, cooling and lighting
Cleaning costs
Decline in value (depreciation) of home office furniture and fittings, office equipment and computers (for items over $300)
Computer consumables, stationery, telephone and internet costs
Items of capital equipment (such as furniture, computers and associated hardware and software) which cost less than $300 can be written off in full immediately

With many retailers running End of Financial Year specials, any purchases you make now can be deducted from this year’s tax return, so from a cash flow point of view, you can minimise the time between purchase and tax deduction!

Alternatively, you can claim the ATO’s concessional 67 cents per hour fixed rate to include several working-from-home deductions in one simple, easy-to-use amount. The rate includes the additional running expenses you incur for:

home and mobile internet or data expenses
mobile and home phone usage expenses
electricity and gas (energy expenses) for heating, cooling and lighting
stationery and computer consumables, such as printer ink and paper.

To use the fixed rate, you must have kept a record of all your working from-home hours for the entire year (e.g., a diary, timesheets or rosters), and you must have one item of substantiation for each item claimed (e.g., a heating bill).

The fixed-rate does not include deductions for work-related use of technology and office furniture such as chairs, desks, computers, bookshelves or repairs to these items. Cleaning costs are also excluded. These costs can be claimed separately, so remember to keep those receipts.

Car expenses

If you use the log-book method, now is the time to check that your logbook is current and that you have all the receipts, invoices and journey records you need to calculate and substantiate your claim. Using the cents per kilometre method, you will still need a record of all work-related journeys during the year.

Mobile Phone

If you used your mobile phone for work purposes, you could claim a deduction for the business-related use. Ensure you have compiled your phone bills and have kept a log of your business/personal use over four weeks. That percentage can then be applied to the whole year.

It’s important to remember that you can’t claim a separate deduction for mobile phones if you have claimed the 67 cent/hour fixed rate for working from home.

Prepay expenses

You can claim a tax deduction this year for expenses which wholly or partly relate to next year. So, if you have some spare cash, consider paying things like union fees, professional subscriptions and annual insurance premiums in advance to accelerate the deduction.

If you have a geared asset like a rental property and have capital to inject, some lenders may allow you to prepay 12 months of interest on your investment loan. This will effectively bring forward your tax deduction into the current year and could help offset any capital gains or additional income you’ve earned.

Make a tax-deductible super contribution

If you have some spare cash, consider contributing to your super fund. Suppose your contributions (including those made on your behalf by your employer) do not exceed $27,500. Your cap may be higher if unused concessional contribution cap amounts are unused. This can be a great way to boost your retirement savings and claim a tax deduction for the personal contribution.

Co-contributions: Low or middle-income earners who make personal super contributions may receive a government co-contribution, up to a maximum of $500.

Employee salary sacrifice: an agreement with your employer to give up part of your salary (thereby reducing your taxable income) and invest it into super to boost your retirement savings.

Spouse contributions: A tax rebate (up to $540) may be available for after-tax contributions to super on behalf of a low-income spouse.

Timing: Contributions must be in your super account before 30 June, or they will count against the next financial year’s limits.

If you’re between 67-74, you won’t need to satisfy the ‘work test’ before making non-concessional contributions. However, you’ll still need to satisfy the work test requirement if you want to claim a tax deduction on your personal contribution.

The payment must be made by June 30th, and you must advise your super by providing a valid ‘notice of intent to claim a deduction for personal superannuation contributions’ to your super fund and have received written acknowledgement.

Small business Initiative during EOFY

Checklist of to-do before year-end

Review year-to-date figures to determine likely tax liability
Consider strategies for management of the likely tax position
Determine dividends to be declared for companies
Prepare distribution minutes for trusts
Consider owners’ remuneration and optimise tax outcome
Small Business Entities – cash vs. accruals/prepayments/depreciation
Make superannuation payments as they are only deductible when paid
Debtor analysis – consider bad debts/timing of invoicing
Creditor analysis – bring forward expenses to get a tax deduction
Stocktake – undertake a stock take and consider obsolete stock
Plant and equipment – consider any new equipment needed and ensure it is available and ready for use before June 30
Fringe Benefits Tax – if FBT return is not lodged, consider a private portion of expenses and GST adjustments
Capital Gains Tax – consider the sale of any investments and prepare likely tax calculations

Asset write off

If so, look to utilise the “instant asset write-off” measure. Provided your business has a turnover of less than $10 million, this allows you to claim an immediate tax deduction for all capital purchases costing less than $20,000 rather than depreciating the cost over several years, as used to happen.

This is great for tech items such as computers, tablets and phones, as well as tools and equipment for tradies, office furniture and even motor vehicles (though any cars will probably need to be second-hand, given the $20,000 limit!).

Remember, besides purchasing, the asset you acquire must be used or available in your business. So, realistically, you need to get the item delivered and installed by 11:59 PM on 30 June 2024 to secure the tax deduction. If you order something now for delivery and installation in July, you won’t be able to claim the deduction this tax year. Note that the instant asset write measure will also be available in 2025.

Maximise your tax-deductible debt

Loans for private purposes are not tax deductible. Review whether refinance options may be available to split your deductible vs non-deductible debt. Determine whether loan repayments can be restructured, as the new rules limit the deductions available against vacant land.

Write off bad debts

If debtors are not recoverable after all action has been taken, write off the bad debt before June 30 to account for the expense. Ensure GST is adjusted.

Write off slow-moving or obsolete stock

Review your stock holding. If the market value is lower than the cost of the stock, you can obtain a deduction for the difference.

Utilise unrealised capital losses

Ensure you take advantage of capital losses within your group. Consider preparing distribution minutes that use group losses.

Check depreciation rates on plants and equipment

Review depreciation schedules for any scrapped plant and equipment that can be written off. Review the effective lives of equipment and consider whether you can increase the depreciation rate.

Check your access to refundable franking credits

Look for opportunities before June 30 to access any refundable franking credits. Consider whether any loss entities could result in a flow of highly franked income, resulting in a refund.

Claim eligible research and development activities

When engaged in research and development activities, clearly document the activities and costs relating to those activities to take advantage of R&D Tax Offsets.

Plan for your tax position before June 30

Understand your options to reduce or defer tax payments. Plan your cash flow for tax instalments and the tax due on tax return lodgements. Identify opportunities to vary tax instalments and improve cash flow. Implement the tax planning measures listed above, as well as other savings.

Other considerations

Planning for one-off transactions – e.g. Business sales or purchases.
Self-managed Super Fund (SMSF) – do you have an SMSF? Consider the impact on the business.
Purchase of property or business premises.
Consider the relevance of existing accounting systems and consider new technology.

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Practice Update September 2025

2 September 2025

Land tax in Australia: exemptions, tips and lessons Land tax is one of those quiet state-based taxes that does not grab headlines like income tax or GST, but impacts property owners once thresholds are crossed. It applies when the unimproved value of land exceeds a certain amount, which differs from state to state. Principal places of residence are usually exempt, but investment properties, commercial holdings, and certain rural blocks may be subject to taxation. For individuals and small businesses, land tax is worth paying attention to because exemptions can make the difference between a manageable annual bill and a nasty surprise. A recent case in New South Wales (Zonadi case ) has sharpened the focus on when land used for cultivation qualifies for the primary production exemption. The lessons are timely for farmers, winegrowers and anyone with mixed-use rural land. The basics of land tax Each state and territory (except the Northern Territory) imposes land tax. Key features include: Assessment date : Usually determined at midnight on 31 December of the preceding year (for example, the 2026 assessment is based on ownership and use as at 31 December 2025). Thresholds : Vary across jurisdictions. For example, in 2025, the NSW threshold is $1,075,000, while in Victoria it is $300,000. Exemptions : Principal place of residence, primary production land, land owned by charities and specific concessional categories. Rates : Progressive, with higher landholdings paying higher rates. Unlike council rates, which fund local services, land tax is a revenue measure for states. It is payable annually and calculated on the total taxable value of landholdings. Primary production exemption Most states exempt land used for primary production from land tax. The policy aim is precise: farmers should not be burdened with land tax when using their land to produce food, fibre or similar goods. However, the details of what constitutes primary production vary. Qualifying uses generally include: cultivation (growing crops or horticulture) maintaining animals (grazing, dairying, poultry, etc.) commercial fishing and aquaculture beekeeping Sounds straightforward, but the catch is in how the land is used and for what purpose. Lessons from the Zonadi case The Zonadi case involved an 11-hectare vineyard in the Hunter Valley. The land was used for: 4.2ha of vines producing wine grapes a cellar door and wine storage area a residence and tourist accommodation some trees, paddocks and access ways During five land tax years in dispute, the taxpayer sold some grapes directly but used most of the crop to make wine off-site, which was then sold through the cellar door. Income was derived from grape sales, wine sales and tourist accommodation. The NSW Tribunal had to decide whether the land’s dominant use was cultivation for the purpose of selling the produce of that cultivation (a requirement under section 10AA of the NSW Land Tax Management Act). The outcome was a blow for the taxpayer. The Tribunal said: Growing grapes was indeed a form of cultivation and amounted to primary production. But cultivation for the purpose of making wine did not qualify, because the exemption only applies where the produce is sold in its natural state. Wine is a converted product, not the product of cultivation. Although some grapes were sold directly, the bulk of the financial gain came from wine sales. Therefore, the dominant use of the land was cultivation to make and sell wine, which is not exempt. The exemption was denied, and the taxpayer was left with a land tax bill. Why this matters For small businesses, especially those that combine farming with value-adding activities such as processing or tourism, the case serves as a warning. The line between primary production and secondary production can determine whether a land tax exemption applies. If most income comes from a cellar door, farmstay, or product manufacturing, the exemption may be at risk, even though cultivation is occurring on the land. Different rules in Victoria Victoria takes a broader view. It defines primary production to include cultivation for the purpose of selling the produce in a natural, processed or converted state. In other words, grapes sold for wine production would still be considered primary production. The only further hurdle is the “use test”, which depends on location: outside Greater Melbourne: land must be used primarily for primary production within urban zones: land must be used solely or mainly for the business of primary production Had Zonadi been in Victoria, the outcome could have been very different. The vineyard would likely have been exempt from this requirement. State-based comparisons Here’s a snapshot of how land tax treatment differs across states when it comes to cultivation and primary production:

Practice Update July 2025

10 July 2025

Shila is taking the leap

Practice Update June 2025