As the end of the financial year approaches, it’s imperative for all of us to conduct a series of checks to ensure their financial affairs are in order. Whether you’re a business owner, employee, or individual, taking the time to review your finances can lead to significant benefits, including maximizing tax deductions and avoiding future penalties.
We at CGA Accounting have accumulated our top essential end of financial year checks:
1. Review your Income and Expenses:
- Income Statement: Gather all income-related documents such as payment summaries, dividends, rental income, and any other sources of income.
- Expense Records: Compile all receipts and records of deductible expenses, including work-related expenses, charitable donations, and investment expenses.
2. Claim Deductions:
- Work-Related Expenses: Ensure you claim all eligible work-related expenses such as vehicle expenses, uniforms, home office expenses (if applicable), and professional development costs.
- Investment Deductions: Review investment-related expenses like interest on investment loans, management fees, and insurance premiums.
- Charitable Donations: Remember to claim deductions for any donations made to eligible charities (usually all donations over $2.00)
3. Superannuation Contributions:
- Check Contributions: Review your superannuation contributions to ensure they are in line with contribution caps and consider making additional contributions to maximize your tax benefits.
- Claim Tax Deductions: If you’re self-employed or not receiving employer contributions, consider making personal contributions and claim tax deductions.
4. Capital Gains and Losses:
- Review Investments: Assess capital gains and losses from the sale of investments such as shares, property, and other assets.
- Offset Gains with Losses: Consider realizing capital losses to offset capital gains and minimize tax liabilities.
5. Small Business Checks:
- Review Financial Statements: Small business owners should review their profit and loss statements, balance sheets, and cash flow statements.
- Claim Small Business Deductions: Take advantage of small business deductions such as instant asset write-offs (now extended for the 2024-25 Financial Year) and deductions for business expenses.
6. Prepay Expenses:
- Maximize Deductions: Consider prepaying deductible expenses such as insurance premiums, subscriptions, and professional memberships before the end of the financial year (usually locking in price rises or receiving discounts at the same time).
7. Health Insurance:
- Check Coverage: Review your private health insurance policy and consider prepaying premiums to claim the private health insurance rebate.
8. Record Keeping:
- Organize Documents: Ensure all financial documents and records are organized and kept securely for future reference and tax purposes. Records are required to be held for at least 7 years after the date of lodgement, regardless if it’s a prior financial year.
- Digital Backup: Consider creating electronic versions of your paper records and storing them securely to prevent loss or damage.
9. Seek Professional Advice:
- Consult your CGA Accounting Professionals: If you’re unsure about any aspect of your finances or tax obligations, seek advice from us, your qualified tax professionals and financial advisors.
10. Lodge Tax Returns on Time:
- Avoid Penalties: Ensure you lodge your tax return by your due date (these can vary depending on your prior lodgements, ask us for yours) to avoid penalties and interest charges.
By overseeing these essential end of financial year checks, you can effectively manage your finances, maximize tax benefits, and ensure compliance with tax regulations. Taking proactive steps now can lead to a smoother tax season and set you up for financial success in the year ahead.
If you need clarification on any of the above checks or would like to complete an end of year review, please contact our team to ensure we can empower you for the next financial year!