Other Year End Issues Checklist
In addition to the tax planning opportunities, there are a number of obligations in relation to the end of the financial year should be considered:
If you use a Motor Vehicle in producing your income you may need to:
- Record Motor Vehicle Odometer readings at 30 June 2017
- Prepare a 13 week log book if your existing one is more than 5 years old. Please note, if you commence the log book prior to the 30 June 2017, the usage determined will still be appropriate for the whole of 2016/17. As such, it is not too late to start preparing one for the current financial year.
If you have started an account-based pension:
Ensure that you have withdrawn the annual minimum required.
If you contribute to Super:
- The maximum tax-deductible contribution for most eligible taxpayers is $30,000. However, the cap increased to $35,000 on 1 July 2014 for individuals aged 49 or more on 30 June 2015. From 1 July 2017, this reduces to $25,000 for all ages.
- Taxpayers who receive “income” of $300,000 or more in 2016/2017 will have their tax-deductible superannuation contributions taxed at 30% rather than 15%. “Income” for this purpose is not defined as your Taxable Income, it is a special definition similar to that used for the Medicare Levy Surcharge. From 1 July 2017, this threshold reduces to $250,000.
If you will be turning 60 years of age or more at some time in 2017/2018:
- You may be eligible to commence a tax-free ‘Transition to Retirement’ (TTR) Pension without stopping work. For this reason, you may wish to have an effective pension start date of 1 July 2017. If so, you need to tell your Superfund before 30 June 2017. Amounts withdrawn after your 60th birthday could be tax free. However, from 1 July 2017 the investment earnings on the amount in your superannuation TTR account will no longer be tax free.
- Superannuants who are aged 55 to 59 may also be eligible to commence a TTR but may pay tax on some of the superannuation pension received.
Non-Concessional Super Contributions
Depending on your personal circumstances (including how much Super you have at 30 June 2017), the 30 June 2017 may be your final chance to make a non-concessional contribution.
Superannuation Pension Cap from 1 July 2017
If your Pension exceeds $1.6 million on 30 June 2017 you have some decisions to make about the rest and about the unrealised capital gains in your pension fund on that day.
If you are in business or earn your income through a Company or Trust:
- Employer Compulsory Superannuation Obligations:
The deadline for employers to pay superannuation guarantee contributions for the 2016/17 financial year is the 28 July 2017. However, if you want a tax deduction in the 2016/17 year the superfund must receive the funds by 30 June 2017.
- The rules regarding trustee distribution resolutions have changed and trustees must make the resolution and have evidence of this by 30 June 2017 at the latest otherwise the ATO will deem that no resolution has been made. Previously the ATO allowed up to 31 August to make the distribution resolution.
- The ATO must be notified by 31 July 2017 of any new beneficiary Tax File numbers
- Is your Loan Account in your business in debit? Will the interest be tax deductible? Will your drawings be considered a deemed dividend? Have you at least paid the annual minimum payment required for your Div7A loan?
- Preparation of Stock Count Working Papers.
- Preparation and reconciliation of Employee PAYG Payment Summaries (Group Certificates).
From 1 July 2017:
The Compulsory Super Guarantee rate stays at 9.50% for the 2017/2018 year up to a new maximum superannuation contribution base of $52,760 per quarter.
Other 2017 Year End Tax Planning Opportunities
Disclaimer: This newsletter contains general information only. No responsibility can be accepted for errors, omissions or possible misleading statements. No responsibility can be accepted for any action taken as a result of any information contained in these articles. It is not designed to be a substitute for professional advice and does not take into account your personal circumstances.