Opportunity Knocks - How to make your EOFY really count!
Do you remember those car ads on TV that made us all familiar with the acronym EOFYS? You pronounce it like this: Ee-oh-fees, just in case you were unsure! The EOFY message urging you to buy before the end of the financial year to ensure a bargain stuck like glue. So much so that plenty of people believe spending up on a hot deal of any sort before June 30 is a sensible thing to do, whatever your financial situation. But there’s another way to look at EOFY that offers you a lot more peace of mind.
“The end of financial year is an Excellent Opportunity For You.”
This time of year is an “Excellent Opportunity For You” to make sure you’re in a better position when it comes to your tax and superannuation. Being able to breathe easy about your finances is a winning feeling. Even more so if you have a business to take care of.
Where to start As simple as it sounds, you need to start with a conversation. Talk to your accountant or business adviser ASAP to get an idea of your current position. You’ll be able to put in place some strategies to manage and minimise your tax liabilities before that Excellent Opportunity For You deadline. Planning and early interventions, often small, can make a big difference.
Changes to be aware of There are lots of recent legislative changes affecting individuals and businesses. Don’t be fooled into thinking these are just directed at the big end of town. There may be more changes ahead too depending on the outcome of the federal election, particularly in relation to franking credits and negative gearing.
It doesn’t matter whether you’re an everyday earner, high-income professional, business owner or building a superannuation fund (you get the idea…almost all of us!) these changes will create potential gains, losses and liabilities. There are too many to list in one article. Your adviser can simplify and help you understand the ones you need to worry about and/or can benefit from.
Online payroll system a must for small businesses From July 1 this affects small businesses with 19 or fewer employees. If that’s you, your online payroll reporting to the Australian Tax Office needs to be compliant and ready to go. We’ve been receiving lots of calls and questions from clients because it’s a significant change for many businesses.
Is your super balance less than $500,000? Did you know you can make concessional contributions of up to $25,000 each financial year? You can also carry forward any un-used concessional contributions for up to five years.
Don’t forget that preservation ages are moving. If you are born after 1 July 1960, your preservation age is no longer 55!
If you have an SMSF (Self Managed Super Fund) with a balance of more than a million dollars, you must now report any ‘event’ that changes your transfer balance within 28 days of that financial quarter ending. Note the new acronym too. It’s called TBAR (Transfer Balance Account Reporting).
Why it all matters The right strategy for your situation means you’ll ultimately have more to save or spend on what matters to you. Between now and EOFY really is an Excellent Opportunity For You.
Renae Korsman and Derek Bouman are both Partners at leading business advisers and accountants DFK Crosbie, which is proudly based in Newcastle. Renae is a highly regarded taxation strategist and business adviser, while Derek is a self-managed superannuation adviser and Specialist Member of the SMSF Association