As the financial year draws to a close, it’s the perfect time to review your financial affairs and set the stage for a successful new financial year. By addressing essential tasks and implementing strategic planning, you can ensure a smooth transition and a strong start for the year to come.
Boosting Your Superannuation
A key task is to maximise your super contributions with both concessional (pre-tax) and non-concessional (post-tax) contributions. Voluntary concessional contributions up to the allowable limit can be claimed as a tax deduction. Additionally, contributing to your spouse’s super account may provide further tax concessions.
If you have unused concessional cap amounts from the past five years and a super balance below $500,000 as of June 30 last year, you could be eligible to make a catch-up contribution exceeding the annual limit. Maximising your contributions boosts retirement savings and offers tax benefits. Ensure all contributions are made before the financial year ends to meet deadlines.
Reviewing Your Investments
Evaluating your investment portfolio is crucial, especially now. Look for capital gains or losses that could be strategically used to manage your tax liability. Assess your portfolio’s performance over the past year against your goals of capital growth, income, or balance. Adjust your goals or investments to enhance performance in the coming year. Always consult with us before making any changes to ensure informed investment decisions.
Prepaying Expenses
Another effective strategy is to bring forward deductible expenses or interest payments before June 30 to lower your taxable income. This could include expenses on investment properties, prepaying interest on investment loans, making charitable donations, or claiming eligible work-related expenses. Maintain detailed records and receipts to support your deductions. The ATO’s myDeductions app is a helpful tool for free record keeping.
Setting Up Salary Sacrifice
Looking ahead to the new financial year, consider setting up a salary sacrifice arrangement. Diverting a portion of your pre-tax salary into your superannuation reduces your taxable income and increases your retirement savings. Evaluate your living expenses to determine how much you can afford to contribute without exceeding the concessional contributions cap of $27,500, which will increase to $30,000 from July 1, 2024. Your employer or payroll department can assist in setting this up.
Checking Your Budget
This is an ideal time to revisit your financial goals and create a strong budget for the new financial year. Review your income and expenses, and identify areas to cut back or increase income. This exercise helps you understand your financial habits and allows you to allocate funds towards goals like debt repayment, building an emergency fund, or increasing investment contributions.
Consulting with Professionals
Don’t overlook the importance of professional advice. Consult with financial advisers, accountants, or tax professionals to maximise your financial growth and tax savings. Expert advice can ensure you’re making the best decisions, providing peace of mind and positioning you to achieve your financial goals.
Your Financial To-Do List
To manage your financial life effectively, stay organised and proactive. Here are some tips:
- Create a checklist: List all financial tasks to be completed before year-end with practical steps to ensure nothing is overlooked.
- Set deadlines: Assign deadlines for each task to stay on track and avoid last-minute stress. Prioritise tasks based on urgency and importance.
- Use online tools and apps: Utilise financial management tools and apps to visualise your cash flow, store records, and track progress.
- Track progress regularly: Monitor your progress, tick off completed tasks, and regularly review your checklist to address any issues promptly.
By addressing these essential tasks, you’ll be well-prepared to start the new financial year in a strong position. Taking the initiative, seeking professional advice, and staying disciplined in your financial management will help you navigate the year ahead confidently and work towards achieving your financial objectives.