End of Financial Year Tax Strategies

As the end-of-financial-year approaches, it’s more important than ever to assess your tax plans or start actioning new ones. In Australia, poor taxation planning means more than simply missing out on valuable deductions; it could result in costly fines and penalties.

Effective financial year tax planning might be the difference your business needs to succeed and grow. In this article, we’ll outline the top strategies you should use to put your business in the best position.

For personalised business accounting and end-of-financial-year taxation advice, contact our team at Foresight Accounting today.

The Financial Year and Common Practice

In Australia, the financial year runs from July 1 to June 30, and it’s crucial to lodge your returns at least a few months prior to the end date. Your specific due date will depend on your business structure.

To prepare for the end of financial year, it’s common practice for businesses to employ year-round recordkeeping services. These are vital so that you can track your finances accurately and compile and submit them on time.

Likewise, many businesses may try to plan ahead. This means setting aside money to invest in software that streamlines bookkeeping, as well as taking full advantage of tax deductions and business write-offs.

However, to do so, you will need a thorough understanding of how the tax system works to ensure compliance. This is why so many businesses rely on a professional business accountant for advice and support.

The Tax Strategies You Need

While your business taxes may be overwhelming, there are a few key strategies you can employ to better manage your finances and protect your assets.

1. Submit Asset Write-offs

The Government has offered an instant $20,000 asset write-off for small businesses until June 30 2025. If your assets were acquired and used prior to this date, they can be submitted for a deduction.

2. Comply With Division 7A

Division 7A rules apply to company structures and trusts. These rules are a provision from the Income Tax Assessment Act that prevents businesses from using company funds for private purposes or for distribution between shareholders and associates.

Failing to comply with Division 7A exposes the shareholder or associate to potentially costly taxation consequences.

3. Superannuation Strategies

Make any super contributions at least a week prior to June 30. By doing so, you can claim a tax deduction for this financial year. For the 2024-2025 financial year, the superannuation concessional contribution cap is $30,000. This is the maximum amount you can pay without paying extra tax.

By doing so, you may be able to reduce your taxable income through deductible contributions and benefit from a lower tax rate for contributions. In addition to the tax benefits, adding to your superannuation is a great way to continue building wealth.

4. Conduct an In-depth Review

Preparation is the best strategy. When preparing for the end of the financial year, it’s crucial to conduct a thorough review of your business and any debts you may have.

In the case of debts, if they are irrecoverable, you may be able to write them off and claim them as a deduction.

Furthermore, assessing your business structure may also give you a leg up in terms of tax. There are different taxation rules that apply to various types of bodies, such as sole traders, partnerships, companies, and trusts.

Along with different taxation rules, each structure comes with its own advantages and disadvantages. Understanding what each is and how they apply to you may give you the edge you need when handling your taxes.

The Advantages of Business Accounting Melbourne

Taxation can be incredibly complex, with numerous rules that may seem contradictory without the right expertise. This is why up to 94% of small businesses rely on a business accounting agent to lodge their returns to stay compliant.

A business accountant is fully trained and experienced in navigating Australian taxation laws. They can assess your business, help you understand what applies to you, and prepare your business to submit accurate and timely tax returns and claims.

They can also utilise the latest taxation strategies, staying up to date with changing rules, to help keep your business in the best position. From recordkeeping to budgeting, financial planning and more, business accountants have the knowledge you need.

Get Expert Local Support With Foresight Accounting

At Foresight Accounting, we have extensive experience supporting a diverse range of industries. With a proactive approach to your financial concerns, we’ll help your business organise and plan ahead for your end-of-financial-year taxes. If you require any type of financial assistance, particularly as the end of the financial year approaches, our team is always here to help.

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