2023 TAX PLANNING TIPS!
The 30th of June is fast approaching and so it’s time to consider the end of the financial year and tax considerations. We’ve put together a list of items that you may want to consider for the financial year ending 30th June 2023:
Super – Individuals
Individuals can currently make personal contributions up to the concessional cap of $27,500 per year. The concessional cap includes employer contributions. Individuals can also access the bring forward rule and use previous years caps to top up their super, so long as they meet certain criteria. If you want to claim a personal tax deduction for super contributions, then a Notice of Intent must be sent to your super fund and acknowledgement received before lodgement of your tax return. Also note that funds must be received and processed by the super fund by the 30th of June, so ideally should be paid no later than the 26th of June.
Super – Business
Superannuation can be claimed in the year paid, so if you want the tax deduction for this financial year then it must be paid and received by the super funds by the 30th of June.
Individuals – Home Office Expenses
The ATO has made changes recently to working from home deduction for the 2023 financial year.
The fixed rate method for calculating your deduction for working from home expenses has been revised. The revised fixed rate method is $0.67 per work hour and available from 1 July 2022.
The fixed rate method has been revised to:
increase the rate per work hour that you can claim when you work from home;
change the expenses the rate covers;
change the record keeping requirements; and
remove the requirement to have a home office set aside for work.
You can also separately claim a deduction for the work-related use of depreciating assets such as office furniture and technology.
If you don't use the revised fixed rate method, you need to use the actual cost method. You can no longer use the shortcut method.
Please see our blog from 17th April 2023 for further details.
Rental Properties
Rental property deductions are a focus area for the ATO for the 2023 financial year. Ensure that you have receipts for deductions. Interest deduction apportionment is a key area especially where properties have been refinanced. Please discuss with your accountant if you are unsure regarding claims.
Depreciation
You may wish to consider buying plant and equipment now to be able to claim temporary full expensing before it ceases on 30th June 2023. From the 1stof July 2023 the instant asset write-off threshold changes to $20,000. Please note that the plant and equipment must be available for use for depreciation can be claimed.
Stock Take
Doing a stock take as at 30th June can assist us in advising how your business has performed during the year and also affects your taxable income. Having a true indication of how your business is performing with a correct stock take can help with future planning.
Low and Middle Income Tax Offset
The low and middle income tax offset ended on 30th June 2022 and is not available for the 2023 financial year.
Tax Deductions
A tax deduction reduces your taxable income, but the tax savings received is based on what your marginal tax rate is. If you are in the $45,000 to $120,000 tax bracket, each dollar you spend as a tax deduction will only save you approximately $0.35 in income tax. Don’t spend purely for the sake of a tax deduction!
As always, if you have any questions about any of the above, please don't hesitate to contact our office to discuss on 08 8523 0999 or admin@milaneseco.com.au.