FY24 Tax planning and Strategies Individuals

As 30 June 2024 is fast approaching, we have prepared some information which may assist you with some tax planning options. Taking advantage of some of these options may put you in a better taxation position this year

Beginning on 1 July 2024, there are large tax cuts available for the majority of individual taxpayers in Australia.

From 1 July 2024, the proposed tax cuts will:

• reduce the 19 per cent tax rate to 16 per cent

• reduce the 32.5 per cent tax rate to 30 per cent

• increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000

• increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000.

As the tax cuts apply to the next income year, the best strategy from a tax point of view is the reduce your taxable income in this tax year, when the tax rate is higher. However, the effects on liquidity must be kept in mind. The following options are available to you to reduce your income this year.

By bringing forward allowable deductions to 2023–24, you benefit from reducing your tax bill at a higher rate per dollar.

If you are under the age of 75, you are able to salary sacrifice tax-deductible contributions from your employer up to the tax-deductible cap of $27,500.

An opportunity is available to you if you have less than $500,000 in super and you want to claim a tax deduction higher than the cap of $27,500. However, a specific limit will apply to you based on how much deductible super contributions has gone into your account over the past 5 years. The additional deductible contributions may give you a deduction at this year’s higher marginal tax rate.

You may be able to claim a deduction for your personal super contributions that you have made you your eligible super fund from your after-tax income. You will need to complete a notice of intent and the funds need to be received by the super fund prior to 1 July 2024