Year-End Tax Planning: Strike Gold, Avoid Traps

Year-End Tax Planning: Strike Gold, Avoid Traps

As the financial year draws to a close, it’s the perfect time to fine-tune your tax strategy. Whether you’re a business owner or employee, smart year-end tax planning can help you strike gold—maximising deductions while avoiding costly mistakes.

Below we explore key tax opportunities and risks, updated in line with current ATO guidance for 2024–25.

Golden Opportunities to Boost Your Tax Outcome

1. Super Contributions – Secure Your Future, Save on Tax

Concessional superannuation contributions are a powerful way to reduce your taxable income and grow your nest egg. The cap for 2024–25 is $30,000, which includes:

Employer contributions
Salary-sacrificed amounts
Personal deductible contributions

If your total super balance is under $500,000, you can carry forward any unused cap amounts from the past five years, allowing for larger catch-up contributions. For example, if you missed $8,000 each year, you could claim up to $40,000 this year. Learn more

Expert Insight: Superannuation remains one of the most tax-effective long-term investments.

Also, if your spouse earns less than $37,000, you may qualify for a $540 tax offset by contributing to their super.

2. Charitable Donations – Give Generously, Claim Smartly

Donating to a registered Deductible Gift Recipient (DGR) can reduce your tax bill. Gifts over $2 are deductible and the higher your income, the more valuable the deduction. A $10,000 donation can reduce tax by:

$3,250 for someone earning $120,000
$4,500 for those earning $180,000+

But remember—buying raffle tickets or auction items doesn’t count. Only genuine donations without material benefits are deductible. More on DGR rules

3. Business Write-Offs – Clear the Clutter, Claim It Now

Scrap obsolete plant and equipment before 30 June to write them off, instead of slowly depreciating them. If customers haven’t paid and recovery has failed, write off those bad debts and document them properly to claim a deduction this year.

With the $20,000 instant asset write-off confirmed for 2024–25, eligible businesses can claim an immediate deduction for assets acquired before 30 June. Just ensure the asset is first used or installed ready for use in time. Instant asset write-off details

Tax Traps to Avoid: Where the ATO is Digging

1. Working from Home Claims – Use the Right Method

With many Australians working remotely, it’s important to know the correct rules. As of 2024–25, the ATO recognises two valid methods:

Fixed rate method: 70 cents/hour for running expenses like electricity, internet, and stationery.
Actual cost method: Claim exact amounts with receipts and a diary of work-related use.

To use the fixed rate method, you must record every hour worked from home for the year. A four-week sample no longer applies. ATO fixed rate method

Expert Warning: The ATO requires accurate records—guesses won’t cut it.

2. Rental Property Pitfalls – Know What You Can Claim

You can only claim rental property expenses when the property is genuinely available for rent. The ATO is cracking down on claims for:

Personal use or unrealistic listings
Incorrectly claimed interest from loans used for personal expenses
Repairs that were actually initial improvements

Initial repairs made when you buy a property (like replacing rotted boards or fixing wiring) are not deductible immediately—they’re considered part of the property’s capital cost. ATO guide on rental expenses

Also, don’t forget:

Capital works (like renovations) are deductible at 2.5% per year over 40 years.
Depreciating assets (like hot water systems) are claimed over time.

3. Gig Economy Income – The ATO Is Watching

Income from platforms like Uber, Airbnb, and YouTube is taxable—even if it’s sitting in your platform account or paid in goods. Since 1 July 2023, these platforms must report your earnings to the ATO under new rules. More on this income

Declare all income honestly to avoid penalties and interest.

Business-Specific Strategies

✅ Do Before 30 June

Write off bad debts and obsolete equipment
Pay June quarter super early
Commit to staff bonuses and directors’ fees by resolution

⚠️ Avoid These Red Flags

Unlodged returns: ATO can issue default assessments.
Professional income splitting: Professionals must be fairly remunerated for services provided.
Incorrect co-owner claims: Expenses must be split by legal ownership, not who paid.

Let’s Help You Strike Gold

EOFY is your chance to get ahead, claim what you’re entitled to, and stay in the ATO’s good books. Let us help you mine the best opportunities—and avoid costly traps.

Contact DJ Grigg Financial today for expert tax advice and tailored support before 30 June.