Are you ready for 30 June 2024?
It’s almost Tax Time again. The 2024 financial year is coming to an end and it’s time for you to start thinking about completing your 2024 Income Tax Return.
What you need to know – Individual
In preparing for your 2024 Individual Income Tax Return, you should consider the following:
The Australian Taxation Office (ATO) has clearly indicated across its various media channels that, this Tax Time, it will be focusing on record-keeping, work-related expenses, rental property income and deductions, sharing economy income; and capital gains from crypto assets, property, and shares
The rate per kilometre for claiming Car expenses is 85 cents per kilometre for the 2024 financial year (up to a maximum of 5000 kilometres).
Clothing tax deductions are only available for occupation-specific clothing, protective clothing, compulsory work uniforms and registered non-compulsory work uniforms (plus the cleaning of such clothing).
The fixed rate Working from Home (WFH) method allows you to claim a deduction of 67 cents for each hour you worked from home. This includes electricity, gas, your phone costs, your internet costs, computer consumables and stationery (such as printer ink & paper). You can claim a separate deduction for the decline in value and repair of home office furniture and furnishings and of technology/computer equipment. To claim the fixed rate method you must keep a record of the total number of actual hours you WFH. Please note that WFH, deductions for “occupation” costs like rent, rates and mortgage interest are under the spotlight as they are not allowable unless you’re actually running a business from home.
Rental property owners should only claim for the periods the property is rented out or is genuinely available for rent. This is particularly relevant for holiday homes. Periods of personal use cannot be claimed. Ensure that interest expenses are correctly apportioned where the investment property has some private use, the property is not genuinely available for rent or there is mixed use of borrowed funds.
Ensure all Capital Gains on cryptocurrency, shares and properties (as well as other CGT assets) are correctly calculated and reported. Record keeping is essential.
It’s worth noting that the highly published Income Tax cuts do not impact your 2024 income tax return. The income tax cuts commence on 1 July 2024 and you should see the impact of these tax cuts in your take home pay. The new tax rates are as follows:
Taxable income($) | Tax Payable ($) |
0 - 18,200 | Nil |
18,201 – 45,000 | Nil + 16% of excess over 18,200 |
45,001 – 135,000 | 4,288 + 30% of excess over 45,000 |
135,001 – 190,000 | 31,288 + 37% of excess over 135,000 |
190,000 + | 51,638 + 45% of excess over 190,000 |
The above table does not include the 2% Medicare levy.
For those without private hospital insurance, the income threshold for the Medicare levy surcharge is $93,000 before the tax, for singles and $186,000 for families.
What you need to know – Business
In preparing for your 2024 Business Income Tax Return, you should consider the following:
Instant Asset write-off. As you may be aware, the Temporary Full Expensing on new business assets is no longer available for the 2024 financial year. In the 2024 financial year the maximum instant asset write-off threshold is $20,000. If the new business asset costs less than $20,000 (GST-exclusive), it will be able to be fully written off under the yet-to-be-legislated instant asset write-off tax deduction. You can claim the total cost of new & second-hand depreciable assets and the total cost of improvements to existing eligible assets that are first used or installed by 30 June 2024. Eligible assets include anything that is used in the running of your business, such as computers; an office or shop fitout; tools for use on a work site; business equipment; phones; and point of sale systems. If the asset costs $20,000 or more, the asset will need to be depreciated over the asset’s effective life.
Prepay expenses. For expenses covering no more than 12 months, an immediate deduction is generally available. This may include prepayments for insurance premiums, phone and internet services, subscriptions to trade or professional bodies and rent on your business premises.
Delay invoicing. Deferring taxable income to the next financial year can help cut your tax in the current financial year
Write-off bad debts. While no business wants to be in a position where they can’t recover a debt, it does happen. If your business has to write off a debt, a tax deduction is available for the amount of the debt written off.
Pay superannuation. Ensure all June quarter superannuation contributions are paid by 30 June to accelerate your tax deduction. To meet this requirement, the contributions must be paid, cleared in the business bank account and received by the employee’s super fund before 30 June.
Get the right trading stock valuation. Damaged and obsolete stock can be written down or written off entirely and a tax deduction claimed.
Record keeping is the foundation of all declared business income and expenses. You must have a record to substantiate the income and deductible expenses reported in your annual business tax return.
What you need to know – Superannuation
In preparing for your 2024 Income Tax Return, you should consider the following:
If you have made tax deductible superannuation contributions in the 2024 financial year (maximum $27,500), please ensure that you have completed and submitted the ‘Intent to Claim’ form with your Super fund.
The key Super changes for the 2024-25 financial year
From 1 July 2024, the Superannuation Guarantee (SG) rate increases from 11% to 11.5%.
The maximum tax deductible superannuation contributions (Concessional Contribution Cap) will increase from $27,500 to $30,000.
The maximum non-deductible superannuation contributions (Non-concessional Contribution Cap) will increase from $110,000 to $120,000.
The Transfer balance cap remains at $1,900,000.
The Capital Gains Tax cap increases from $1,705,000 to $1,780,000. This cap is a lifetime cap that applies to contributions made by a member for their benefit where the contribution is sourced (directly or indirectly) from a small business capital gains tax being either the 15-year concession or the retirement concession.
Get Ready
For your convenience, we have prepared a 2024 Individual taxation checklist and a 2024 Small Business taxation checklist. To assist in preparing your 2024 income tax return, you should to review these checklists.
Don't be too eager
The Australian Taxation Office (ATO) has recommended that taxpayers should not be too eager to complete their tax returns this year and ensure that all their information is accurate before lodging their 2024 income tax returns. According to the ATO, your employment income statement and other information collected by the ATO may not be finalised until late July 2024. Your 2024 income tax return should not be completed without this information. As a result of ATO recommendations and restrictions, we will be taking appointments from 1 August 2024.
Time to meet
It's your choice. We will be conducting our appointments in-person, via Zoom or by telephone. Please click of the following link to book an appointment now.
At National Taxation, we're great listeners and we know that every single one of our clients are unique. We have a proven track record and are well equipped with the latest knowledge to ensure that your income tax return is prepared in the most professional manner, at a reasonable cost. Our objective is always to maximise your TAX REFUND. We look forward to being of service to you.
Disclaimer
The information presented is general in nature and not to be used, relied or acted upon without seeking professional advice to ensure that the information appropriate for your individual circumstances. National Taxation accepts no liability for any errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. www.nationaltaxation.com.au ABN 63 665 545 130.
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