As the end of the financial year approaches, Australians are looking for effective strategies to cut their tax bills. With the deadline looming on June 30th, it’s essential to act swiftly and strategically. Here are some last-minute tips to help you save on your tax bill and make the most of the deductions and offsets available.
For example, did you know doing one single thing now will snare you $540 tax back after July 1? That’s a tax rebate, so it is lopped straight off the top of your bill. This, plus a couple of other easy techniques will secure you large deductions.
Let’s start with that $540 tax rebate.
Probably the most effective way to cut your tax at the 11th hour is to make a contribution to a spouse’s super. One spouse needs to contribute $3000 and to be eligible for the full rebate, the receiving spouse needs to earn below $37,000. But some is paid on incomes up to $40,000. Here, the lower-earning spouse doesn’t need to be actually earning, so the truly beautiful thing about this is that it’s a whole-of-family way to stop carer breaks hurting someone’s retirement.
As the women’s budget statement reiterated: “The superannuation gap … currently sees women retire with around 25 per cent less super than men.” (From July 2025, super contributions being made on top of government paid parental leave – which is also going up to 26 weeks – will be a small step to fix this.)
Getting back to the spouse contribution solution, you need to pay the $3000 after tax as a non-concessional contribution. Just contact your superannuation fund for how.
Super savings
While not a tax hack, it’s an opportunity that disappears on July 1, if you yourself make a $1000 after-tax contribution to super, you could receive that free $500 into your fund. Called the co-contribution, you do have to be earning in some capacity to be eligible for this one. You qualify for the full amount this tax year if your income is less than $43,445 and some up to $58,445 (next financial year, the respective thresholds are $45,400 and $60,400). You should aim to take up these big super perks each year and every year – doing so would put you closer to a comfy retirement.
Income protection insurance
If you don’t have this, you need it. Forget your house; your income is your most valuable asset. What would you do if sickness or injury meant you weren’t able to earn it? Getting a year ahead (or even more if you can afford it) on your premiums also neatly brings down for this expensive year, your assessable income by that same amount – so getting your safety sorted today carries double the benefit.
Prepay Deductible Expenses
If you can afford to, consider prepaying some of your deductible expenses before June 30th. This could include professional subscriptions, insurance premiums, or even interest on investment loans. By bringing forward these expenses, you can claim the deductions in this financial year, reducing your taxable income.
Utilise Instant Asset Write-Offs
Businesses can take advantage of the instant asset write-off scheme. If your business has a turnover of less than $5 billion, you can immediately deduct the business portion of the cost of eligible depreciating assets. This can provide a significant tax benefit by reducing your taxable income. Ensure the asset is installed and ready for use by June 30th to claim the deduction.
Defer Income
If possible, consider deferring income to the next financial year. This strategy can be particularly useful for self-employed individuals or small business owners. For example, you could delay invoicing clients until after June 30th to defer the income and the associated tax liability.
Take Advantage of Tax Offsets
Several tax offsets are available to reduce your tax bill, such as the low and middle-income tax offset (LMITO). Ensure you are aware of any offsets you may be entitled to and claim them accordingly.
Organize Your Records
Accurate and organized records are crucial for maximizing your deductions and minimising your tax bill. Ensure you have all necessary documentation for your income and expenses, including receipts, invoices, and bank statements. Good record-keeping will make your tax return preparation smoother and help you avoid missing out on potential deductions.
Consider Professional Advice
Engaging a tax professional can provide tailored advice and help you identify all possible deductions and offsets. They can also ensure your tax return is accurate and compliant with ATO regulations, reducing the risk of audits and penalties.
Review and Adjust Withholdings
If you’ve had significant changes in your financial situation, review your tax withholdings. Adjusting your withholding rate can help you avoid a large tax bill at the end of the year. Use the ATO’s online withholding calculator to ensure you’re withholding the correct amount.
Conclusion
Taking proactive steps before the end of the financial year can make a significant difference in your tax bill. By maximizing super contributions, prepaying expenses, utilising asset write-offs, making charitable donations, and organizing your records, you can ensure you’re taking full advantage of available deductions and offsets.
Act now to implement these strategies and save on your tax bill as the financial year draws to a close.
Source: ATO
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