With under two weeks left until the end of Financial Year (EOFY) 2025, it’s time to take stock and check if there’s any benefits to act on.
Whether you’re a young accumulator, have a young family or are near or in retirement, this checklist will help you maximise tax benefits and prepare for the new financial year.
Click into each for the details.
Year-end strategies to maximise tax deductions
- Claim your work-related expenses: List out and put aside invoices of expenses you can claim for work. Depending on how much you use things for work, it could include parts of your phone bill, costs of running your car, or part of your utilities or rent if you work from home!
- Logbook for work related car expenses: You can either claim $0.88 per km of work-related car travel up to 5,000 km a year (a total of $4,400 tax deduction), but you would likely get a larger deduction by keeping a 12-week logbook. The percentage of work-related car travel from your logbook can be applied to all your work-related car expenses, such as petrol, servicing, insurance and general maintenance (even car washes!).
- Small business instant asset write-off: Small business owners can deduct up to $20,000 per asset before 30 June 2025. This is a great opportunity to invest in necessary business equipment while reducing your taxable income. This scheme ends 30 June 2025! so be sure to take advantage if it makes sense for your business.
- Prepay interest on investment loans: You could prepay up to 12 months of interest on an investment loan to claim as this financial year’s deduction. This strategy can be particularly useful if you think your income this year puts you in a higher tax bracket than next year.
- Keep good records and be sensible: Be truthful and maintain diligent records of your income tax deductions and report all your sources of assessable income. The ATO receives data from financial organisations and if you fail to report income or deductions that make sense for your assets and occupation, you could be flagged for an audit.
Boost your super contributions
- Max out your concessional contributions: You can contribute up to $30,000 this FY as concessional contributions. If you’re employed, you are being paid 11.5% of your wages as this type of contribution, and you could top up to $30,000 by making personal contributions to your super before 30 June 2025. You can then claim this as a tax deduction to reduce your taxable income.
Note your fund needs to receive your contribution before 30 June 2025, so make sure you leave ample time for your contribution to reach your fund. Also be sure to check how much in concessional contributions you can still make this financial year using your myGov ATO portal or contacting your super fund.
- Catch-up concessional contributions: If your total super balance was less than $500,000 on 30 June 2024, then you are eligible to use your unused concessional contributions caps from past five years. This can lead to a substantial one-off boost to your superannuation which you can claim as a tax deduction.
- Non-concessional contributions: You can contribute up to $120,000 this year before 30 June 2025 in after-tax money if you are under age 75 and your total super balance was less than $2,000,000 on 30 June 2024.
- Government co-contribution: Those earning $62,488 or less can receive up to $500 from the government to their super by contributing up to $1,000 as a non-concessional contribution to super.
- Spouse contributions: If your spouse is earning $40,000 or less, then you can make a spouse contribution of up to $3,000 to their super and receive up to $540 in a tax offset for your own taxable income. This helps boost your spouse’s super and helps you save in tax.
Planning ahead for the next financial year
- Avoid extra tax if you are a higher income earner: If you earn $101,000 or more (singles) or as couple earn $202,000 or more, you can avoid an extra tax called the Medicare Levy Surcharge of up to 1.5% in extra income tax by having private hospital cover.
- Set your financial goals: Define and break down your financial goals for the new financial year. Having clear goals helps you stay focused and motivated throughout the year and you can see how you went about your goals this time next year.
- Revisit your budget and habits: Draft a monthly budget and track your spending. Regularly reviewing your budget can help you identify areas where you can save more, or identify spending habits you may not know about.
- Build an emergency fund: Having an emergency fund set aside gives you a safety net in case of the unexpected. Look at setting aside around 3 months of regular expenses as a start, and keep these funds in another account away from your day to day cash flows.
- Stay accountable: Schedule regular check-ins with your goals and budget to monitor your progress. Regular monitoring helps you stay on track and make adjustments which will help you reach your goals.
- Seek professional advice: Consult experts for tailored financial strategies. Professional advice can help you optimize your financial plan and achieve better outcomes.
Financial housekeeping and staying safe
- Set up or update your will and estate plan: Make sure your will and estate plans are in place, up to date and reflect your wishes. It’s a simple step to check in with each year to protect your assets and your family.
- Stay vigilant around EOFY scams: End of financial year is a time to be extra vigilant around scams and phishing attempts. Be wary of any text messages or emails claiming to be from your employer, super fund, bank or the ATO. Double check email addresses (don’t rely of the name of the email!) before clicking anything. Never click on links or contacts sent to you from text messages or emails, and if you aren’t sure, always use your employer’s, super fund’s, bank’s or the ATO’s official phone number online to check with them.
- Maintain good cybersecurity habits: The only way to stay safe and not be a victim of cyberfraud and scams are to make yourself the first line of defence. Safeguard your personal, sensitive information by keeping things like account numbers, tax file numbers and personal information away from your emails and text messages. Delete emails from the past you have sent or received with your account numbers to ensure that if your email is of little use to a hacker who has compromised your email.
Following these guidelines will ensure that you are well-prepared and in a strong position before the start of the new financial year.
As always, feel free to reach out to us if you have any questions or want to discuss any of these strategies.
General Advice Warning: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, Mandate Financial Planning and Futuro Financial Services Pty Ltd do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, Mandate and Futuro do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
