kristopher

Tax Return Checklist

We’re over the hump of the worst of winter and slowly creeping our way closer to spring. In central Vic, this means a lot of wet weather but glimpses of the warmth that might come our way soon!

Now that June 30 is over and done with and we’re well into July, a lot of you are starting to think about your tax returns and what you need to get together to give to your accountants.

There’s a whole heap of speculation over what you need to provide and where you get stuff from – so we’ve broken down some of the key points that we get asked a lot to help out.

Please note that sometimes, if you have complex investments and depending on your super fund and investment platform, you may not receive all of your information that you need for your tax return before your lodgment date. If this is the case, let your adviser or your accountant know what you’re waiting on so you can discuss options.

Here’s a checklist with some of the most frequent items we get asked about:

Tax Return Checklist

• Income Protection Premiums. If you pay for income protection insurance that is held outside of super and paid for out of pocket, you may be eligible for a tax deduction. Your insurance company will send you your EOFY statements for this with the amount you can claim anytime from now, for you to pass onto your accountant. If you have an adviser, we may also send them to you as well directly.
• Super Statements. Your 23/24 end of financial year super statements will start to become available between now and December, depending on your fund. They will be sent directly from your super fund or adviser. If you have online access you may also be able to login and download them directly depending on your fund, and don’t forget that a lot of the info flows through to your MyGov account.
• Investments. If you hold shares, managed funds, ETFs or any other similar investment within a trading platform or investment account, you will also receive an EOFY statement. As these rely on each fund manager or share company to provide reporting, they can take a bit longer to come through to you. For example, the SelfWealth platform releases these around the end of July, but some platforms will be as late as September or October.
• Notice of Intent to Claim. If you have made contributions and lodged a Notice of Intent to Claim form, you may want to provide your acknowledgement letter from your super to your accountant. These are usually completed and sent to you within a few weeks of your super contribution being reclassified.
• Advice Fees. There is so much speculation over whether adviser fees are tax deductible, and unfortunately the answer is that at the moment, they aren’t. You may be able to claim deductions for your accountant’s fees and other tax costs, but at the moment, the ATO doesn’t recognise financial advice fees as a deduction.

As always, if you want to chat just give me a ring. You can book directly in with me HERE. There are also a couple of our recent articles HERE which you may not have seen.

Take care and speak soon!

Kris

What You Actually Need To Know Before June 30

In our industry everyone bangs on about the end of the financial year (which is nowhere near as exciting or celebratory as the end of the calendar year), but people are still confused about what they should actually be doing.

This year, to make it as easy as possible for you (and us), we’ve found an amazing downloadable guide with easy, actionable information all about tax tips and super strategies to help you prepare for the end of financial year.

Have a read through, and as always let us know if you want to discuss any of the above further. Please bear in mind that not all the strategies will be applicable to you, and always speak with your professionals before putting anything in place. If you want to meet with us and you aren’t already one of our wonderful clients, you can book directly in with Kristopher here. 

You can reach us via email at hello@wealtheon.com.au or via phone on 1800 577 336. If you want a hand or to know what your current nominations are, just give us a shout!

What Happens To Your Super When You Die?

The macabre side of financial planning – it’s not just insurance cover that leads us down a morbid path in this business, it’s also your estate planning.

Estate planning is a necessity whether we like it or not. Sometimes you just have to sit down and think about what will happen when you die (the practical side, not the “is there an afterlife” side).

It’s mainly to ensure that those you leave behind are looked after and your wishes are adhered to.

What does this have to do with super?

You hear us banging on all the time about your beneficiary nominations and how important they are, but do you actually know why? The most crucial thing that a lot of people don’t understand is that your super may not form part of your estate when you die, meaning what’s in your will doesn’t impact it. Considering super is often a person’s most valuable asset (especially as most of us have been building it since we were 14!), you definitely want to make sure that it’s left to the people you want to have it.

The Facts.

To make our job super easy in getting the info over to you, our friends at Colonial First State have put together one of the best fact sheets we’ve seen on what happens to your super. It’s got all the facts, breaks it down into who you can nominate and what those nominations involve, and also goes through an explains a lot of the jargon and key words/phrases that you need to know.

You can get a copy here.

Have a read through, and as always let us know if you want to discuss any of the above further. If you want to meet with us and you aren’t already one of our wonderful clients, you can book directly in with Kristopher here. 

You can reach us via email at hello@wealtheon.com.au or via phone on 1800 577 336. If you want a hand or to know what your current nominations are, just give us a shout!

2024’s Key Dates To Keep On Top Of Your Financial Game

New Year, new you! As we charge into 2024 refreshed and recharged from another festive season, now is a great time to get on the front foot and understand some key dates that will help you keep on top of your financial game for another year.

Super Transfer Balance Caps

In January and February, the release of the Consumer Price Index (CPI) and Average Weekly Ordinary Time Earnings (AWOTE) figures will play a pivotal role in determining potential changes to the general Transfer Balance Cap (TBC), contributions caps, and associated Total Super Balance (TSB) thresholds starting from July 1, 2024. While the impact may seem distant, it’s crucial to consider implications for contribution and retirement advice before the end of this financial year.

With the inflation rate showing signs of easing, the likelihood of the general TBC being indexed to $2 million from July 1 seems somewhat improbable. However, it’s advisable to stay vigilant, as any adjustment to a $2 million cap could influence advice early in the upcoming year.

For instance, individuals should weigh the decision of commencing a retirement phase pension before or after July 1. Is it worthwhile to wait for potential indexation and a higher personal TBC? Understanding the costs involved is crucial. It’s also essential to assess the impact of pension refreshes on any indexation of the client’s personal cap, whether performed before or after this critical date.

Additionally, a review of clients with high-balance Transition to Retirement Income Streams is recommended, especially those who may fulfill a full condition of release before the fiscal year’s end. A Transition to Retirement (TTR) pension automatically enters retirement phase when an individual turns 65 or notifies the super fund that they’ve met specific full conditions of release.

These arrangements may necessitate a thorough review, with considerations to either commute part or all of the pension balance back to accumulation. This is done to avoid an excess transfer balance amount or to maximize the personal TBC by ensuring entry into the retirement phase aligns with the higher TBC when it takes effect.

Super Contribution Caps

Recent upticks in Average Weekly Ordinary Time Earnings (AWOTE) are pointing towards a potential expansion of contribution caps. This could result in an increase to both concessional and non-concessional caps, potentially reaching $30,000 and $120,000, respectively.

It’s important to note that the general Transfer Balance Cap (TBC) plays a crucial role in determining Total Super Balance (TSB) thresholds, which, in turn, influence non-concessional limits for high-balance clients, including those falling under the bring-forward rule. Consequently, any adjustments to either contribution caps or the general TBC will have implications on the eligibility for non-concessional contributions in the upcoming financial year. The table provided below offers a summary of potential limits effective from July 1, based on potential indexation.

As depicted in the table, the indexation of the general TBC holds the potential to enhance contribution opportunities for high-balance clients. However, it’s noteworthy that if contribution caps increase while the general TBC remains at $1.9 million, eligibility for contributions from July 1 might experience a slight decrease.

Given these potential changes, it is advisable to closely monitor developments early in the new year to maximize contribution opportunities and to be mindful of various scenarios. The table below outlines the potential outcomes to facilitate a better understanding.

Concessional Contributions

As we approach the end of the financial year, it’s crucial to review contribution strategies, especially with the imminent expiration of unused concessional contributions carried forward from FY19 and the commencement of Stage 3 tax cuts on July 1. This presents an opportune moment to ensure clients optimize their use of the concessional contributions cap.

Since July 1, 2018, the ability to carry forward unused concessional contributions for up to five financial years has been in effect. This means that the current financial year marks the final opportunity to capitalize on unused concessional contributions accumulated in FY19. Voluntary concessional contributions can be facilitated through a salary sacrifice arrangement or by claiming a deduction for a personal contribution, if eligible. It’s important to note that only prospective income can be salary sacrificed, necessitating a review of agreements in a timely manner to capitalize on unused concessional contributions. Alternatively, making a personal deductible contribution may be the simplest way to leverage the concessional contributions cap. However, it’s crucial to submit a valid Notice of Intent within the specified timeframes and before any withdrawals, rollovers, or pension initiations.

To determine available unused concessional contributions, clients can log into myGov. Additionally, the Total Super Balance (TSB), which must be below $500,000 on the prior June 30, is displayed on a separate screen, so it’s important to verify both components.

Conclusion

As always at the start of a new year, it’s so important to make sure you have some key dates marked on the calendar to refresh your finances and make sure you take advantage of changes. If you want more information on the above, don’t hesitate to get in touch with us by booking in a free 20 Minute Discovery Call here. Don’t forget to check out some of our other articles on similar topics, like this one here.