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Smart EOFY Strategies 20192019-06-06T10:49:13+10:00

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End of Financial Year Strategies 2019

Get Tax Ready with SMART

Published May 2019

With the end of the financial year approaching, it’s a great time to make smart decisions about your finances. Taking action before 30 June can open up more opportunities for you. We know that there isn’t a one-size-fits-all solution to accounting, wealth management and business growth. So we’ve outlined some tax-effective strategies that you may benefit from. We can help you find what strategies are right for you and/or your business.

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Prepared by Modoras Accounting (Qld) Pty Ltd, Modoras Accounting (SYD) Pty Ltd and Modoras Accounting (VIC) Pty Ltd

Strategies for business

Single Touch Payroll

Single Touch Payroll

Applies to all employers from 1 July 2019 – estimated to bring 700,000 businesses into the regime.

Transition period – 1 July to 30 September 2019 where no penalties will be imposed.

Real time reporting of payroll details e.g. super to the ATO –available to employees via myGov.

Superannuation (SGC) Amnesty

This announcement was not passed by Parliament and the clock runs out on 24 May 2019.

Payment to workers

No deduction if the business does not meet its PAYG withholding obligations.

Applies to salary, wages, commissions, bonuses paid to employees.

Also applies to payments for supply of services where a contractor has not provided their ABN.

Audit activity is on the rise

Cash businesses are a major focus.

Be aware of information sharing and matching between government and non-government institutions.

Benchmarking of businesses continues and more industries are being added.

Consider taking out audit insurance – it’s not only deductible but can cover cost of defense in the event of a claim.

Instant asset write-off

$20,000 – 1 Jul 2018 to 28 Jan 2019
$25,000 – 29 Jan 2019 to 2 Apr 2019
$30,000 – 2 Apr 2019 to 30 Jun 2020

Available to businesses with a turnover of up to $10 million. Items costing more will be subject to the depreciation rules.

Motor Vehicles

Motor vehicles

The depreciation limit for 2019 FY is $57,581 – it applies to both the depreciation as well as the GST credits claimable.

Using the Ute to avoid FBT

This area is receiving high amount of ATO attention.

Watch the second condition of the exemption rules.

“Private use” is the ATO focus – home to work travel and private trips (limit to length per trip and total per annum).

Director fees and/or bonuses

For businesses working on the accruals basis – declare the payment and obtain the deduction n 2019 FY – the recipient is not assessed until it is actually paid, effectively dropping it into 2020 FY.

Delay the receipt of income

When accounting for income on a cash basis, delaying receipt until after 30 June will delay tax liability by a full tax year.

For those on accruals – it is important to hold back issuing of invoices for this to work.

If accounting on a cash basis… Make sure to pay creditors by 30 June

If cash flow allows, ensure creditor accounts are paid before 30 June to maximize deductions.

Remember – the 12 month rule will apply to prepayments – i.e. registrations, insurances and subscriptions.

Amounts under $1,000 are excluded from 12 month rule.

Re-structure to a corporate entity

Consider a restructure form a trust to a corporate entity to take advantage of a flat company tax rate.

Companies with a turnover of $50 mil or less will be taxed at 27.5% in 2019 FY (proposed to drop to 25% by 2021/22).

Introduce a corporate beneficiary to a discretionary trust

If a re-structure is not feasible, consider making a distribution to a company and maximize tax at 30%.

Good strategy for families with beneficiaries that are close to turning 18 years of age.


Want to know more?

Contact a Modoras Professional on 1300 888 803 or book an appointment.

Knowledge is power!

Prepared by Modoras Accounting (Qld) Pty Ltd, Modoras Accounting (SYD) Pty Ltd and Modoras Accounting (VIC) Pty Ltd

Strategies for individuals

Maximize deductions!

But remember they must be substantiated…

Motor vehicles

2 methods available

  • cents per km (up to max 5,000kms)
  • log book method (no limit)

New rate for c/km method is now 68 cents per kilometer (was 66 c/km) – no need to log all trips but must be reasonable calculation.

If using a log book – make sure you have one as well as receipts & invoices for all running costs.

If using log book – make sure receipts & invoices for all running costs are also kept.

Travel from home to work & back not allowed unless –

  • transporting bulky equipment,
  • traveling to an abnormal workplace or
  • where home is the work base.

Home Office

Home office

Working from home vs. home as principal place of business. No dedicated work area = no deduction.

New rate of 52 cents per hour (up from 45). Phone & internet expenses treated separately.

Tools & equipment

100% deductible for items up to $300. Depreciate items costing over $300 (based on reasonable life).

Must apportion between private and work use for those items with multi/dual use (i.e. computers, laptops, telephones, etc.)

Rental Properties

Rental properties

Don’t forget to claim depreciation and building write off.

Must be based on surveyor’s report. Cost of report is tax deductible.

Prepayment of expenses

Individuals can bring forward purchases prior to 30 June.

For example paying for expenses due next year prior to 30 June such as memberships, subscriptions, tools under $300, office supplies, interest expense, & income protection insurance.

Division 293 threshold

Applies to those with an income of over $250,000.

Levies an additional 15% tax on concessional super contributions – effectively increases tax on contributions to 30% (versus the normal rate of 15%).

Watch for one off events such as terminations or capital gains as these may go over the $250,000 threshold.

Maximizing salary sacrifice when employed by FBT Exempt employer.

Salary sacrifice up to $30,000 for public benevolent institution or health promotion charities.

Salary sacrifice up to $17,000 for public and not for profit hospitals or public ambulance services.

Other NFP institutions may be eligible for rebates (check eligibility with your employer).


Want to know more?

Contact a Modoras Professional on 1300 888 803 or book an appointment.

Knowledge is power!

Prepared by Modoras Pty Ltd

Tax Advantage

The tax advantages of saving in super

Saving more in super can come with tax and other benefits this financial year – but that’s just the start.

Once money is invested in super, earnings are taxed at a maximum rate of 15% – instead of your marginal tax rate, which may be up to 47%* including Medicare levy.

This low tax rate can help build up savings for retirement

Strategy 1

Consider adding to super and get a tax deduction.

This may be right for those who… are self employed or earn taxable income from other sources (such as investments).

Make an after-tax super contribution and claim a tax deduction.

What are the benefits?

  • Pay less income tax
  • Increased retirement savings
Strategy 2

Get more from your salary or bonus and minimize tax payable.

This may be right for those who are an employee.

Contribute pre-tax salary or a bonus into super, as part of a salary sacrifice agreement.

What are the benefits?

  • Pay less income tax
  • Increased retirement savings
Strategy 3

Convert savings into super savings.

This may be right for those who have money outside super.

Use this strategy by making an after-tax super contribution.

What are the benefits?

  • Pay less income tax
  • Increased retirement savings
Strategy 4

Get a super top-up from the Government.

This may be right for those who earn less than $52,697 pa.

Use this strategy by making an after-tax super contribution.

What are the benefits?

  • Receive a Government co-contribution of up to $500
  • Increased retirement savings
Strategy 5

Boost the spouses super and reduce tax.

This may be right for those whose spouse earns less than $40,000 pa.

Use this strategy by making an after-tax super contribution into the spouses super account.

What are the benefits?

  • Receive a tax offset of up to $540
  • Increase the spouses retirement savings
Tips and traps

Before adding to super, keep in mind money will be inaccessible until certain conditions are met.

There are caps on how much can be contributed to super each year.

It’s important to take the caps into account as penalties may apply of exceeded.
Make sure any contributions are received before June 30.

With electronic transfers (including BPAY) the contribution takes effect the day the super fund receives the money, not the day of transfer.

Getting Advice

Getting advice

Other eligibility criteria and conditions apply in relation to these strategies.

Talk to a Modoras planner to help decide which strategies are most appropriate.


Want to know more?

Contact a Modoras Professional on 1300 888 803 or book an appointment.

Knowledge is power!

Prepared by Modoras Pty Ltd


Prepaying income protection premiums for immediate tax benefits

Income protection insurance is an important form of cover.

This type of insurance pays out if income is unable to be earned as the result of injury, illness or disability.

Some policies can also include cover for redundancy and other involuntary unemployment.

How does pre-paying for tax purpose work?

The premiums paid on income protection insurance are often tax-deductible if held outside of superannuation.

Income protection insurance policies held through super funds may also be tax-deductible for those self-employed.

Pre-paying a number of premiums in advance can increase the deductible amount claimable.


Prepay investment debt and claim payments this financial year.


Want to know more?

Contact a Modoras Professional on 1300 888 803 or book an appointment.

Knowledge is power!

Modoras - End of Year Strategies 2019
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Financial Planning and Credit services are offered through Modoras Pty Ltd ABN 86 068 034 908. Australian Financial Services and Credit Licence No. 233209.
Accounting services are offered through Modoras Accounting (QLD) Pty Ltd ABN 81 601 145 215, Modoras Accounting (VIC) Pty Ltd ACN 145 368 850 and Modoras Accounting (SYD) Pty Ltd ABN 18 622 475 521

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