With some planning and preparation, the 2024 End of Financial Year (EOFY) doesn't have to be too taxing, either on your time or your hip pocket. This short checklist of 7 tips is designed to help individuals get ready for the upcoming tax season and new financial year ahead.
What we'll cover
- Paperwork Prep
- Income, Incoming
- Manage Your Deductions
- Medicare
- Tactical Investment Timing
- Get App-y to Simplify Your Life
- Deadlines Are Non-Negotiable
Let's get straight into it, shall we?
1. Paperwork prep
Ensure you have all necessary financial records such as income statements, statement of position relating to any investments, and receipts for business-related purchases, motor vehicle expenses, travel expenses etc. A good rule of thumb here is that if you think you might need that financial record, hold on to it - you can always discard it later.
2. Income, incoming
Income isn’t limited to what you receive from your employer. It can also include bank interest, dividends, rental income, and capital gains, among others. It can also include foreign income, or profits (hopefully) from cryptocurrencies; the latter are particularly interesting to the Australian Taxation Office (ATO) so be prepared for some scrutiny.
3. Manage your deductions
Refer to step 1, which was 'Paperwork Prep'! You will have kept a record of all your business-related expenses - these may include the following:
- Car, transport and travel expenses
- Tools, computers, internet, stationery, and books
- Working from home expenses including energy and office equipment
- Self-education, conferences and training
- Clothes, glasses and protective gear.
The full list of eligible work-related personal deductions can be found on the ATO website.
Don't forget your charity donations are also a potential tax deduction.
4. Medicare
If you take out private health insurance, you're potentially entitled to rebates of the 2% Medicare levy if you earn over a certain amount. You can read more about how the Medicare levy works on the ATO website.
5. Tactical investment timing
Consider making prepayments on investment loans or planning capital gains strategies, such as selling underperforming investments to realise a capital loss. These actions can adjust your taxable income and potentially enhance your financial situation.
Moneysmart has a quick and easy overview on how investment income is taxed. Additionally, with the upcoming tax changes, it may mean that from 1 July you're paying less tax. This is definitely a consideration in deciding when to offload any investments, and any resulting capital gain.
6. Get App-y to simplify your life
Where would we be without apps to streamline our financial affairs? Some favourites from us here at Grow My Money are:
- One Click Life - available on Grow My Money, so you can earn $20 cashback towards your mortgage or super when you sign up to One Click Life.
- Tax Fox
- Etax
7. Deadlines are non-negotiable
To avoid late penalties, you can find these important dates on the ATO website here.
If you're a business owner
If you're also a business owner, we recommend taking a look at Xero's blog on business EOFY readiness - it's similar to this, but with other tools and resources.
We hope this has been helpful in outlining seven ways to help you at the 2024 End of Financial Year. A little research and a lot of preparation should streamline the preparation of your individual tax returns. And hopefully, contribute more to your mortgage or superannuation through Grow My Money as you do!
This blog contains general advice only and does not take account of an individual’s objectives, financial situation or needs. Before acting on this general advice, individuals need to consider its appropriateness having regard to their objectives, financial situation or needs and should seek their own independent advice.