Your end of financial year checklist

The end of the financial year is an opportunity to take stock of your financial situation, prepare for tax time, and plan for the next year.

While the wide array of financial choices can seem overwhelming, this guide offers a practical checklist designed to get you to the year end and beyond.

No guide can be a one-size-fits-all solution – everyone’s financial journey is unique. Instead, the guide aims to spark ideas that can help you enhance your financial position, from reviewing your income and expenses, to optimising your tax position, to updating your super.

“Planning ahead can make a big difference to your financial wellbeing and peace of mind,” says Michael Tran, BT’s Technical Consultant.

“By taking some simple steps to review and improve your finances, you can make the most of tax time and start the new financial year with confidence and clarity.”

Review your income and expenses

A useful first step to improving your finances is to make sure you have a clear picture of where your money is coming from and where it is going.

A budget is a useful tool to help you track your income and expenses and identify areas where you can save more or spend less.¹

Reflect on the effectiveness of your budget over the past year. Did it help you achieve your goals? If your budget is not working for you, now is the time to try to find ways to adjust it to suit your needs and goals. Online tools and apps can help you create and manage your budget.²

It’s also a good time to review your debt.³

For many, getting control of expensive credit card debt is a major step to financial security. Start by looking at whether you can pay extra to reduce any debt. Arranging a balance transfer from a high interest rate card to a low- or zero-rate card can also help you get on top of credit card debt - so long as the balance is then paid off within the interest free period.

If you have a mortgage, spending some time reviewing the loan is also worthwhile. Many of us do not regularly check whether we are on the best possible rate. Shifting to a better rate could save thousands over time, and you may not even have to change banks to get some savings.

Optimise your tax position

Tax time can be stressful, but it can also be rewarding if you know how to make the most of your deductions and concessions.

By planning ahead, you can reduce your tax liability and boost your cash flow.⁴

Some of the things you can do to optimise your tax position before the end of the financial year include:

• Claim deductions for work-related and home office expenses, such as travel, equipment, uniforms, subscriptions, and phone and internet bills. Make sure you have receipts or records to support your claims.
  
  
• Claim deductions for self-education and professional development expenses, such as course fees, textbooks, stationery, and travel. The expense must be related to your current work or income-earning activities.
  
  
• Claim deductions for charitable donations. The charity must be a registered deductible gift recipient. Most will issue you with a receipt, but you do not need this to claim if you can show evidence of the donation in another way like on a bank statement.
  
  
• Claim deductions for investment expenses, such as interest, fees, and repairs and maintenance. The expenses must be related to earning income from your investment.
  
  
• Making personal super contributions, which are taxed at a concessional rate that can be lower than your marginal tax rate. You can claim a tax deduction for up to $27,500 per year, but this figure includes any employer contributions. You must notify your fund of your intention to claim a deduction and receive an acknowledgement from them.⁵ Do remember that super contributions are generally not accessible until retirement over age 60.
  
  
• Making spouse super contributions, which can entitle you to a tax offset of up to $540 if your spouse earns less than $40,000 and you contribute up to $3,000 to their super fund.⁶
  
  
• Accessing the government’s super co-contribution scheme, which can boost your super savings by up to $500 if you earn less than the threshold and make a personal after-tax contribution of up to $1,000 to your super fund.⁷
  
  
• Prepaying expenses, such as interest, insurance, subscriptions, or memberships, which can allow you to claim a tax deduction in the current year for expenses that relate to the next year.
  
  
• Deferring capital gains by delaying the sale of an asset which can reduce your taxable income in the current year and defer the tax liability to the next year.
  
  
• Reviewing depreciation of assets used for income production. This can allow you to claim a tax deduction for the decline in value of your assets such as buildings, fittings, and furniture.

Check in on your superannuation

Superannuation is a crucial part of a comfortable retirement and proper management of super today can set the stage for rewarding retirement years.

The end of financial year period is another ideal time to give your super some attention.

According to SuperGuide, more than half of retirement income is earned during actual retirement, so it is never too late to set your super on the right track.⁸

As the end of financial year approaches, you may not have access to an up-to-date super statement, but you can usually get the information you need through your fund’s website portal.

Comparing your super’s performance to benchmarks or similar funds can help you understand if you need to make changes.

While you are considering your super, there are two important quick checks you can make.

First, check your beneficiaries are up to date – your super savings can outlive you so it’s important you make sure you are in control of where your money goes in case you die.

And second, if you have multiple super accounts, now may be a suitable time to consolidate to a single account. You can do this on the Australian Taxation Office’s website. Moving to one account can save you fees.

Conclusion

The approach of the end of the financial year presents a prime opportunity to not only maximise last-minute tax deductions and strategies but also to conduct a broader financial review.

This is a good time to assess your overall financial health, ensuring you're not just meeting immediate tax obligations or seizing the moment's opportunities but also taking the strategic actions that set you up for long-term financial success.

It’s important to remember that you do not have to do this alone – professional financial advice can help.

A financial adviser can help you better understand your goals and challenges and develop a personalised plan to help get you where you want to go – as well as ensuring you do not miss any immediate opportunities to improve your financial position.

1. https://www.bt.com.au/personal/investments/learn/before-you-get-started/getting-started-basics.html
2. https://moneysmart.gov.au/budgeting/budget-planner
3. https://www.bt.com.au/personal/your-finances/manage-personal-finance/how-to-manage-your-debt.html
4. https://www.bt.com.au/personal/your-finances/manage-personal-finance/end-of-financial-year-checklist.html
5. https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/personal-super-contributions
6. https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/spouse-super-contributions
7. https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/super-co-contribution
8. https://www.bt.com.au/personal/your-finances/retirement/retiring-this-year.html

This document has been prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian Credit Licence 233714 (Westpac) and is current as at 30 May 2024. The information in this document regarding taxation and legislative change is based on policy announcements which are yet to be passed as legislation and may be subject to future change. This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it.