Get ready for end of 2024 Financial Year
We are almost approaching the end of the 2024 Financial Year. This post provides essential information and tips to help individual taxpayers and business owners prepare for the new year.
Individuals (Common Mistakes and Tips)
Working from Home
You can use one of the following methods to claim your working from home expenses:
- Fixed Rate Method: Claim $0.67 per hour worked from home. Note that a timesheet, roster, diary or other similar document is required to use this method.
- Actual Cost Method: Calculate the actual expenses incurred.
Rental Property
The ATO states that 9 out of 10 property owners make errors in their tax returns. Common mistakes include:
- Claiming net rent instead of gross rent.
- Claiming expenses, that should be depreciated over a period, as 100% repair and maintenance costs. any capital items (e.g. dishwashers, washing machines, etc.) with a value of $300 or more need to be depreciated.
- Claiming interest expenses for non-rental related purposes.
- Not amortizing borrowing costs over 5 years.
Motor Vehicle
There are two methods available for claiming motor vehicle expenses:
- Logbook Method: Calculate the deductible amount by multiplying the total car-related expenses (e.g., petrol, registration, depreciation) by the business use percentage as recorded in your logbook. Please read the requirements here for maintaining a valid logbook for tax purposes.
- Cents per Kilometre Method: Claim $0.85 per kilometre for up to 5,000 kilometres.
Donations
Ensure that all donations have a Deductible Gift Recipient (DGR) status to claim a tax deduction. Generally, if the receipt states that ‘donation over $2 is tax deductible’, then it should be eligible.
Personal Super Contribution Deduction
You can claim personal super contributions as a tax deduction in your 2024 Individual Tax Return. Please check with your super fund for eligibility and/or visit the ATO website for more information. In a nutshell, you need to make a personal (after-tax) super contribution before the end of the 2024 Financial Year, apply to your super fund and obtain an acknowledgement letter.
Small Businesses
Single Touch Payroll (STP) Finalisation
Please ensure your payroll is finalised, and your STP data is lodged by 14th July 2024. For more information, please visit the ATO website.
Super Guarantee Rate Increase
The Super Guarantee Rate will increase from 11% to 11.5%, effective from 1st July 2024.
National Minimum Wage Increase
From 1st July 2024, the National Minimum Wage will increase by 3.75%. As a result, the new minimum wage per hour will be $24.10.
Private Company Loans (Division 7A Loan)
If your business loans money to you as a shareholder without a loan agreement, the loan must be repaid in full before the due date or lodgement of the company’s return lodgement, whichever occurs first. Failure to do so may result in adverse tax consequences.
Small Business $20,000 Instant Asset Write-Off
Unfortunately as of the date of writing this post, this measure is not yet law and is currently before Parliament. Once passed, small businesses with an aggregated turnover of less than $10 million will be able to claim an immediate tax deduction on eligible assets costing less than $20,000. These assets must be first used or installed ready for use between 1st July 2023 and 30th June 2025. For more information, please visit the ATO website.
Trust Distribution
Trust distribution resolutions must be dated and signed before 30th June 2024 if there is any income to be distributed. Backdating the document will invalidate it, and the trustee will be taxed at a penalty tax rate.
Feel free to book an appointment with us if you need any assistance.
WL Advisory is a Chartered Accounting firm. We specialise in accounting, tax, and advisory services for individuals and small businesses. Please visit our website for more information. (Get ready for end of 2024 Financial Year)