Minimise Taxes, Maximise Wealth

Tax planning is an important tool to ensure businesses and individuals minimise tax and maximise wealth. It always makes good financial sense to plan ahead to make the most of the available tax savings. Some of these measures include:

Superannuation Contributions

You could look to maximise superannuation deductions before 30 June 2025 by:

• Contributing to your personal superannuation to the $30,000 annual limit.
• If your superannuation balance is less than $500,000 and you’ve made concessional contributions of less than the concessional contributions cap in the past 5 years, you may be able to make additional concessional contributions in subsequent financial years for any unused amounts. 
• If you earn less than $60,400 p.a., you could be eligible for the government co-contribution. The government will contribute 50 cents for every dollar of after-tax contributions you make to your superannuation fund up to a maximum of $500. The full benefit is available for income earners under $45,400 and phases out where adjusted taxable income is between $45,400-$60,400.
• If you earn less than $37,000 p.a., you could be eligible for the government low-income super tax offset. This offset will be applied when preparing your tax return and equals 15% for every dollar of concessional contributions you make to your superannuation fund, up to a maximum of $500 
• Ensuring your business superannuation contributions for employees are paid and cleared by 30 June 2025.

Prepayment of Expenditure

Small businesses, with a turnover of less than $10m, can look to prepay expenditure to bring forward tax deductions. The main prepayments of expenditure are loan interest, and rent.

Note however when applied to interest, the rate needs to be fixed to action a prepayment and therefore your interest rate doesn’t fluctuate with any potential RBA movement. All this needs to be considered carefully to ensure that prepaying expenditure does not drain cash reserves that could be used to take advantage of other opportunities through the following financial year.

The use of Franking Credits

If you find yourself in the position of projecting a taxable loss for the 2025 financial year, there may still be a silver lining. Depending on the structure of your business, you might have the opportunity to reclaim tax previously paid by any companies within your group.

This tax is known as franking credits and they are attached to any dividends declared by a company. If planned right these franking credits can be used to offset tax obligations and, in some circumstances, result in a refund of credits/tax. 

Beware of the Asset Changeover

The removal of the temporary full expensing in 2023, which was replaced by the $20,000 small business immediate write off, could cause a significant increase in the taxable income for your business. Careful consideration needs to be given on any assets or equipment traded in or sold during the financial year as this could have some unwanted tax outcomes. 

Plan Now Before it’s too Late

With the end of the financial year fast approaching, businesses have a window of opportunity to have tax strategies in place prior to 30 June.

As part of the Brentnalls SA tax planning service, we can do the following:

• Review of the expected annual results,
• Look at the strategic options available to you, 
• Meet with you before the end of the financial year,
• Ensure you can maximise the opportunities available to you, and
• Make sure your business and family group entity structure are fit for purpose.  

Call our team today to discuss end-of-year tax planning. It can set your business up for the following financial year, backed by the possible benefit of valuable tax savings.

Disclaimer

The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual financial situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.