2024 Tax Returns and Tax Planning Tips

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Happy New Financial Year from everyone at Darkwave. Here are some quick tips, notes and items to be aware of as we look to finish off the financial year.

ATO Prefill Information – Reminder of when tax information will be ready for your lodgement
Tax information for your 2024 lodgement may not be ready on the 1st July 2024. If you have employment income, your employer has until the 14th July to finalise your Payment Summary data with the ATO. If you have Bank Interest, Dividends or Private Health Insurance, this information is normally not available until late July/early August. If you have Managed Fund investments, this information may not be available until September/October. It is recommended to wait until you have all this information on your ATO records before your return lodgement is commenced. Rushing ahead to lodge prior to information being ready can lead to missing information in your return, resulting in audits and ATO penalties later on.

Debtors and Prepayments
Check business debtors and consider writing off any trade debtors deemed unrecoverable.

Bring forward expenses, usually any expenditure that would be paid within the next year can be claimed this financial year under prepayment rules for small business.

Consider delaying invoicing to 1 July if cashflow allows.

Inventory and Asset Management
Consider writing down value of stock – write off any damaged or obsolete stock, and where the market price is less than the cost of the stock, you can value the stock at the lower value.

Assess plant & Equipment listed as an asset and write down the value of any plant and equipment no longer in use.

Income in Advance
Review income received close to the EOFY. Where payment has been received in advance of services or work being provided, the income may be assessable in the year the services are delivered and/or work completed.

Office Expenses
Stock up on general business items such as office supplies, computer consumables – those items can be claimed this year that will be used next year.

Employee Superannuation
Pay all employee super for the June 2024 quarter prior to EOFY, note that some superfunds and clearing houses did have 14 June as the cut-off date to guarantee processing by 30 June, therefore it may already be too late for some super funds if not already actioned.

Employee Bonuses
Staff Bonuses. Ensure any staff bonuses are paid out prior to EOFY. Check if employees would prefer to receive all or part of the bonus as an additional super contribution noting that the personal concessional contribution Cap is $27,500 in 2024 FY, this amount can be increased if a taxpayer has a carry-forward unused concessional contribution from previous financial years.

Employer Obligations
The superannuation guarantee rate will rise from 11% to 11.5% from 1 July 2024. The rate will subsequently rise by another 0.5% next year to make a final rate of 12% by the 2024-25 income year. Employers should review employment contracts and ascertain whether the employee’s package is inclusive of or excluding superannuation guarantee.

Employers must comply with PAYG reporting and withholding obligations to claim a tax deduction for payments made to workers (including employees and contractors). If a business fails to withhold PAYG from workers’ payments or do not report the amounts to the ATO prior to an audit/review, they may be considered non-compliant payments and treated as non-deductible for income tax purposes. Care must be taken when paying associates (e.g., business owners or their family members) to ensure the business meets the withholding and reporting obligations.

Finalise Single Touch Payroll for all employees with the ATO. Ideally, this should be done as soon as the final pays for the 2024 financial year are processed.

Compliance Reminders for Business
Related Party Loans – Check that loans to and from companies and trusts comply with the current Division 7A provisions and ensure the business has made the minimum repayments during the year for any complying Division 7A loans.

Dividends – Review your franking account and record any dividends paid to shareholders in your accounting systems. Ensure you have met your documentation/notification requirements.

Trust resolutions – Subject to the terms of the Trust Deed, a discretionary trust needs to resolve how to distribute its income before 30 June 2024. If you are operating a trust please ensure these resolutions are made in writing prior to 30 June.

If you’re looking to start on your Tax Return for 2024, just click the link below to get going
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