With 30 June just around the corner, now is the perfect time to take a close look at your finances and implement smart strategies to reduce your tax bill. Effective tax planning can save you money, improve cash flow, and keep you compliant with the ATO.
Here are some simple, legal ways to reduce your taxable income before the end of the financial year.
1. Prepay Expenses
If you’re a sole trader or small business with turnover under $50 million, you can prepay certain expenses for up to 12 months and claim the deduction this financial year. This could include rent, insurance, subscriptions, or interest on loans.
2. Make Super Contributions
Concessional (before-tax) super contributions—such as salary sacrifice or personal deductible contributions—are a powerful way to reduce your taxable income and boost your retirement savings.
For the 2024–25 year, the concessional cap is $30,000. If you haven’t used your full cap in previous years and your super balance is under $500,000, you may also be eligible to carry forward unused amounts.
Important: Contributions must be received by your fund before 30 June to count.
3. Write Off Bad Debts
If you have invoices that are never going to be paid, now is the time to write them off. As long as you previously included the debt in your income and it is genuinely unrecoverable, you can claim it as a deduction.
Make sure to document your efforts to recover the debt.
4. Review Asset Purchases
The instant asset write-off allows small businesses to immediately deduct the cost of eligible assets under $20,000, if installed or ready for use before 30 June 2025. Consider whether upgrading equipment or tools now could benefit your business—and your tax position.
5. Top Up Business Deductions
Consider any deductible spending you’ve been putting off—such as staff training, marketing, or office supplies. Bringing these forward into this financial year can increase your deductions.
Final Tip
Good tax planning isn’t about dodging tax—it’s about knowing the rules and using them to your advantage. Talk to your accountant now so you can take action before 30 June and make the most of the opportunities available.
