EOFY Tax Planning- 2023

Prepare for the end of the financial year (EOFY) with our comprehensive checklist of important tasks, expert tips, and advice for 2023. Whether you’re a business owner or an individual taxpayer, we’ve compiled a list of key areas to focus on when organizing your tax affairs for the year-end.

For Businesses, here are the essential tasks:

Ensure timely payment of superannuation before the year-end.
Take advantage of the temporary full expensing of depreciating assets.
Write off any bad debts before the year-end.
Consider scrapping or disposing of plant and equipment before the year-end.
Value yours closing stock at the lowest possible value.
Commit to staff bonuses before the year-end.
Repay any expenditure that is eligible for an immediate deduction.
Accrue expenses that will be paid after the year-end.
Deduct the cost of consumables included in your closing stock.
Enjoy immediate deductibility of start-up costs.
These recommendations aim to help businesses optimize their tax position and take advantage of available deductions and benefits.

For Individuals, here are the essential tasks:

Strategy 1: Increase Personal Super Contributions: Consider making additional contributions to your superannuation fund before the end of the financial year. This can be a tax-effective way to invest in your retirement, as these contributions up to the annual cap of $27,500 can be claimed as an income tax deduction.
Strategy 2: Avoid Medicare Levy Surcharge: To avoid paying the Medicare levy surcharge, ensure that you have adequate private health insurance coverage for yourself and your family.
Strategy 3: Regular Charitable Donations: If you are passionate about supporting charitable causes, consider making tax-deductible donations to Australian Deductible Gift Recipients (DGRs). This allows you to contribute to your community while potentially reducing your tax liability.
Strategy 4: Self-Education Expenses: Expenses related to furthering your education and skills in your current employment may be tax-deductible. This includes costs associated with further study, professional development, training, seminars, and self-education. You may also be able to claim expenses for engaging an Executive Coach.
Strategy 5: Maintain Records for Work from Home (WFH): If you have been working from home, ensure you keep accurate records of your expenses related to your home office, such as utilities and office equipment. These expenses may be eligible for tax deductions.
Strategy 6: Consider Income Protection Insurance: Evaluate your need for income protection insurance, which can provide a safety net in case of unexpected events that result in a loss of income. Premiums for income protection policies may be tax-deductible.
Strategy 7: If you own an investment property, one strategy to consider before the end of the financial year is to prepare a depreciation schedule and pay for it before June 30th. Depreciation refers to the decrease in value of an asset over time, and for investment properties, this depreciation can be claimed as a tax deduction.

Here’s how you can implement this strategy:

Engage a Qualified Quantity Surveyor: Contact a qualified quantity surveyor who specializes in preparing depreciation schedules for investment properties. They will inspect your property and identify the depreciable assets within it.

Prepare the Depreciation Schedule: The quantity surveyor will create a detailed depreciation schedule that outlines the depreciable items in your property, their respective values, and the applicable depreciation rates. This schedule will be used to claim depreciation deductions on your tax return.

Pay for the Depreciation Schedule: Make sure to pay for the preparation of the depreciation schedule before June 30th. The cost of preparing the schedule is tax-deductible, so by paying before the end of the financial year, you can include this expense in your tax deductions.

Claim Depreciation Deductions: Provide a copy of the depreciation schedule to your accountant or tax professional when preparing your tax return. They will use the information in the schedule to accurately claim depreciation deductions for your investment property. These deductions will help reduce your taxable income and potentially lower your tax liability.

It’s important to note that individual circumstances may vary, and Australian tax laws and regulations can change. Consult with a qualified tax professional to ensure these strategies align with your specific situation and comply with current tax laws.

Thank you! If you have any more questions or need further assistance, feel free to call TFP Tax Accountants on 0893860047.
Good luck with your tax planning and all the best to you too!