With a focus on the end of the financial year, it’s time to act on opportunities to improve your tax position. It is also important to consider changes in legislation that may have a financial impact on you or your business.
With that in mind, here are our Top 5 Tax Tips for the end of the 22/23 financial year.
1. Concessional Superannuation Contributions
Tip one is to consider making additional concessional superannuation contributions (CCs) to minimize your tax. That could mean saving as much as 32% of your income, depending on your marginal rate of tax. This is also a great way to build your superannuation balance, as you look towards retirement.
Keep in mind that the annual concessional superannuation contribution limit is $27,500 per person, which includes contributions made by an employer on your behalf.
2. Catch-up Concessional Super Contributions
Did you know that if your personal superannuation balance was less than $500,000 at 30 June 2022, you may be entitled to make a catch-up (or carry forward) concessional super contribution in addition to that $27,500 annual limit? Hall Browns can help by reviewing your catch-up concessional contribution limit, so contact us if you would like more information.
3. Temporary Full Asset Expensing (TFE)
This one is time critical. Currently eligible businesses can claim an outright tax deduction for the cost of eligible depreciating assets. There is no limit to the value of the asset, however for a taxable purpose it must be used (or installed ready for use) by 30 June 2023. So, time is running out to take advantage of this accelerated tax deduction.
Moving forward, it was announced in the 2023/24 Federal Budget that the instant asset write-off will temporarily return at a reduced $20,000 limit from 1 July 2023 to 30 June 2024. That applies to small businesses with a turnover of up to $10 million.
4. Fringe Benefits Tax (FBT) – Portable Electronic Devices
They’re an integral part of modern work life, and portable electronic devices that are primarily used on the job (that is more than 50% of the time) are exempt from FBT.
It means that employers can provide laptops, mobile phones and similar devices without incurring FBT liability – as long as those devices are used appropriately.
There’s also the option for employees to salary sacrifice these items and receive the benefit of an outright deduction against their income. They may also be eligible to save an added 10% if their employers are registered for GST.
5. Pay Staff Superannuation before 30 June
Finally, remember that in order to receive a deduction for your superannuation contributions in the current financial year, they will need to be paid by 30 June, 2023.
Software providers like Xero and MYOB have their own cut-off dates, to ensure superannuation is processed on time. This year that is 2pm on14 June.
From 1 July, 2023 the superannuation guarantee rate increases from 10.5% to 11%, and further increases of 0.5% are scheduled annually until the rate reaches 12% on 1 July 2025. This means two things:
- employers should ensure that their payroll software is up-to-date before the EOFY so that future super payments are processed at the correct rate.
- employees need to check their first payslip in July 2023 to confirm that their super has been correctly calculated.
Following these five tips will have you better prepared to launch into the new financial year, however they are general advice only and you should speak to an accountant about your own circumstances before making any decisions.
Contact Hall Browns on 07 3831 1055 if you would like assistance.