June 30 is approaching – what you need to know now

So lockdown is being eased again – excellent.

But lockdown or no lockdown, the rest of Australia beyond Melbourne continues to tick along as COVID-normal, which means we’re rapidly approaching the end of financial year and everything that comes along with it.

It’s going to be a hell of a year for tax planning, in particular calculating income. It’s important to note that all JobKeeper payments are assessable income, but any state government personal or business grants are exempt from paying tax.

From a superannuation perspective, if you’re an employee it’s probably too late now to make any pre-tax super contributions, as you’d need to have notified your employer of that intention. You can still make after-tax contributions, but I’d suggest giving us a call if that’s something you’re interested in doing.

If you’re self-employed you can still make a concessional super contribution of up to $25,000, as long as it’s done before 30 June.

For capital gains, do a schedule now as you may have losses that can offset gains that you have realised. This would also require advice so get in touch if you think this applies to you.

Below are the ATO’s wordings on superannuation and CGT. If you have questions get in touch sooner rather than later.

You can maximise your superannuation deductions before 30 June 2021 by:

  • Ensuring superannuation contributions for employees are paid and cleared by 30 June 2021,
  • If your superannuation balance is less than $500,000 and you’ve made concessional contributions of less than the concessional contributions cap of $25,000, you may be able to make additional concessional contributions in subsequent financial years for any unused amounts. Unused cap amounts can be carried forward for up to five years, 
  • If you earn less than $54,837 p.a., you could be eligible for the government co-contribution. The government will contribute 50 cents for every dollar of after-tax contributions you make to your superannuation fund up to a maximum of $500. The full benefit is available for income earners under $39,837 and phases out where adjusted taxable income is between $39,837-$54,837.

If you have derived any capital gains from the sale of your investments or business assets this year, consider whether you can offset them by crystallising any capital losses on the sale of other assets (where possible), or be able to use the CGT Small Business concessions. Please contact us to discuss prior to 30 June to minimise or eliminate any potential CGT.

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