As the end of the financial year (EOFY) approaches, now is the time to take a proactive approach to tax planning. Whether you're a sole trader, SME owner, or investor, implementing the right strategies can help reduce liabilities, maximise deductions, and improve cash flow. Recent tax changes impacting Australian businesses mean staying informed and planning ahead is more important than ever. In this guide, we outline five practical tax strategies to optimise your financial position before 30 June.
1. Maximise Your Tax Deductions Before EOFY
One of the most effective ways to reduce taxable income is by claiming all eligible deductions before the financial year ends. Both individuals and businesses can benefit from reviewing expenses and making necessary purchases before 30 June.
Key tax deduction opportunities include:
Prepaying business expenses – Small businesses with turnover under $50 million can prepay expenses such as rent, insurance, and software subscriptions up to 12 months in advance to bring forward deductions.
Writing off obsolete inventory – Businesses should review stock levels and write off obsolete, damaged, or slow-moving inventory to reduce taxable income.
Superannuation contributions – Making voluntary concessional contributions to your super fund before 30 June can be tax-deductible, provided you stay within the cap of $27,500 for the 23-24 tax year, or $30,000 from July 1 2024. You may also be able to carry forward unused concessional cap amounts if your total super balance is under $500,000.
Work-from-home expenses – Employees working from home can claim running costs under the ATO’s current methods, while sole traders can deduct business-related expenses such as professional development, travel, and equipment purchases. Ensure to keep all relevant receipts and the log of working hours.
To ensure compliance with Australian Taxation Office (ATO) guidelines, keep detailed records and receipts of all deductible expenses.
2. Take Advantage of the Instant Asset Write-Off
If your business is planning to purchase equipment, vehicles, or technology, consider bringing forward these investments before 30 June to take advantage of the instant asset write-off.
Extension of the $20,000 limit: The government proposes extending the instant asset write-off threshold of $20,000 for small businesses with turnover under $10 million, now covering eligible assets first used or installed by 30 June 2025.
Full deduction for assets under $20,000: Small businesses can claim an immediate deduction for each asset costing less than $20,000, including certain second-element costs incurred between 1 July 2024 and 30 June 2025, provided it meets the eligibility criteria.
Depreciation rules for higher-cost assets: Assets of $20,000 or more will continue to go into the simplified depreciation pool, with a 15% deduction in the first year and 30% each subsequent year; any pool balance under $20,000 at the end of 2024–25 can be written off.
By planning ahead and making asset purchases before EOFY, businesses can maximise tax deductions while investing in essential equipment.
3. Boost Super Contributions for Tax Savings
Superannuation remains one of the most tax-effective ways to build wealth and reduce taxable income. Making additional contributions before 30 June can lower tax liabilities while increasing retirement savings.
The concessional (pre-tax) super contributions cap is $27,500 for the 2023–24 financial year, and from 1 July 2024, the cap rises to $30,000. It is recommended to check these caps each year, as they may be indexed.
Individuals with a super balance under $500,000 can use unused concessional caps from the past five years to make larger deductible contributions.
The Superannuation Guarantee (SG) rate will increase to 11.5% from 1 July 2024 and to 12% from 1 July 2025, impacting employer payroll obligations.
Making voluntary concessional contributions before EOFY can help reduce taxable income, but it is important to stay within the limits to avoid excess tax penalties.
4. Claim Available Tax Offsets and Incentives
Tax offsets directly reduce the amount of tax payable, making them an important tool for individuals and businesses.
Key offsets and incentives for 2024-25 include:
Small Business Income Tax Offset – Sole traders, partnerships, and trusts with turnover under $5 million can receive an offset of up to $1,000 per year. More details can be found here.
R&D Tax Incentive – Businesses investing in eligible research and development activities may qualify for generous tax offsets, subject to meeting strict eligibility requirements. More details on R&D tax incentive and eligibility criteria can be found here.
Fringe Benefits Tax (FBT) concessions – Companies offering electric vehicles or remote work benefits should review available FBT concessions to reduce liabilities.
Energy Incentive - Businesses with an aggregated annual turnover of less than $50 million will have access to a bonus 20% tax deduction for the cost of eligible assets and improvements from 1 July 23 to 30 June 24 that support more efficient use of energy.
Reviewing eligibility and accessing available incentives before EOFY can unlock valuable tax savings.
5. Prepare for 2024-25 Tax Law Changes
With major tax changes taking effect from 1 July 2024, tax planning should extend beyond EOFY.
Key changes include:
Individual income tax rates and threshold changes:
reduced the 19 per cent tax rate to 16 per cent
reduced the 32.5 per cent tax rate to 30 per cent
increased the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000
increased the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000.
The concessional (pre-tax) super contributions cap is $27,500 for the 2023–24 financial year, and from 1 July 2024, the cap rises to $30,000.
Fringe Benefits Tax (FBT) concessions – Companies will not need to pay fringe benefits tax on eligible electric cars and associated car expenses. Conditions apply.
Energy Incentive - Businesses may have access to a bonus 20% tax deduction for the cost of eligible assets and improvements from 1 July 23 to 30 June 24 that support more efficient use of energy.
ATO is increasing compliance audits on cryptocurrency transactions, rental deductions, and work-from-home claims. They also use data matching from third-party platforms like Airbnb to identify undeclared income or over-claimed deductions, making accurate record-keeping essential. Read more here.
Retiree Considerations – Self-funded retirees should confirm their pension drawdown requirements for 2024–25 to ensure they meet minimum rules and avoid penalties.
To stay ahead, businesses and individuals should review salary structures, deductions, and compliance obligations well before EOFY.
Take Action Now to Reduce Your Tax Liabilities
With EOFY fast approaching, proactive tax planning is key to reducing liabilities and optimising your financial position. By maximising deductions, leveraging offsets, and preparing for upcoming tax changes, you can ensure compliance while keeping more money in your pocket.
At Sageon, our tax planning services are designed to help businesses and individuals optimise their tax strategies and navigate EOFY with confidence.
Book a consultation today to make sure you take advantage of every tax-saving opportunity before 30 June.