EOFY Tax Checklist for SMEs: 10 Things to Do Before 30 June

Welcome to this presentation from Quantum House — Sydney’s leading accountants and tax advisers.

Today we are covering one of the most valuable topics in the entire tax calendar for any small business owner: the end of financial year tax checklist — ten things to do before 30 June.

The end of the financial year is the single most important period in the tax calendar for Australian businesses — yet many SME owners arrive at 30 June unprepared, missing valuable opportunities to reduce their tax.

The key message of this whole presentation is simple: tax planning is not something you do after the year ends. It must happen before 30 June, while you still have the ability to make decisions that affect your tax outcome.

We will walk through all ten actions every SME owner should take in the lead-up to year-end. Let’s get started.

Before we get into the ten specific actions, let me explain why EOFY planning matters so much — and why timing is everything.

The single most important concept in this presentation is this: tax planning must happen before 30 June. Not after. Once the financial year ends, the overwhelming majority of tax planning strategies are permanently closed. You cannot retrospectively make a superannuation contribution, write off a bad debt, or pass a trust resolution after the year has ended.

This is why the businesses that save the most tax are not necessarily the ones with the most complex strategies — they are the ones that plan the earliest. Acting in April or May gives you options. Acting on the 29th of June gives you very few. Acting on the 1st of July gives you almost none.

On the right, you can see the ten actions grouped into five themes, which is how we will work through them: bad debts and prepaid expenses; superannuation and the instant asset write-off; payroll tax and BAS reconciliation; trust distributions and the small business asset pool; and finally Division 7A loans and the most important action of all — meeting with your accountant before year-end.

Let’s work through each one.

Let’s start with the two most immediate actions — both of which are about bringing deductions forward into the current financial year.

Action One: review and write off bad debts. If you have debtors you genuinely believe you will never collect, you can claim a tax deduction for those amounts — but only if you formally write them off in your accounts before 30 June. This is critical: the write-off must be a documented accounting entry before year-end. Simply deciding in your head that a debt is bad is not enough. Review your aged debtors report now, identify the irrecoverable amounts, and formally write them off.

Action Two: bring forward deductible expenses. Many business expenses can be prepaid before 30 June and deducted in the current year — rent, insurance, subscriptions, advertising, and professional fees are common examples. The 12-month rule allows small businesses to immediately deduct these prepayments where the prepayment period does not exceed twelve months. If you are having a high-income year, deliberately accelerating this expenditure into the current year can produce a meaningful tax saving.

These next two actions are among the most powerful deductions available to a small business before year-end.

Action Three: consider a superannuation contribution. Concessional — that is, pre-tax — super contributions are tax-deductible up to the annual cap, which is $30,000 per person for the 2025–26 year. If you have not yet maximised your contributions, making one before 30 June reduces your taxable income dollar for dollar. One important practical point: you must allow enough time for the contribution to actually clear and be received by the fund before 30 June — a contribution still in transit on the 1st of July does not count for this year. And if you have unused concessional cap from the previous five years and a total super balance below $500,000, you may be able to make larger catch-up contributions.

Action Four: review the instant asset write-off. This allows eligible businesses to immediately deduct the full cost of depreciating assets up to the applicable threshold, rather than depreciating them over several years. The threshold and eligibility rules have changed frequently in recent years, so you must check the current rules with your accountant. If you have been planning to buy equipment, vehicles, or technology, doing so before 30 June can bring forward a substantial deduction. The critical requirement is that the asset must be installed and ready for use by 30 June — not merely ordered or paid for.

These two actions are about compliance — preventing costly errors and avoiding nasty surprises.

Action Five: check your payroll tax obligations. Payroll tax is a state-based tax, and the thresholds and rates vary from state to state. As your business grows and your payroll increases, you may cross the threshold that triggers a registration obligation. Importantly, this includes not just wages to employees but also contractor payments that are deemed to be wages under the legislation. Reviewing your total annual wages against the applicable threshold before year-end — while you can still take action — is far better than discovering an unregistered liability after the fact, when penalties and interest may apply.

Action Six: reconcile your BAS and GST position. Before you lodge your June BAS, make sure every bank account, credit card, and business expense is fully reconciled in your accounting software. Missing transactions or miscoded items create errors in your BAS. Those errors flow in both directions: underpayments lead to interest and penalties when discovered, while overpayments mean you have unnecessarily tied up cash. A clean reconciliation also means your year-end tax return can be prepared quickly and accurately, rather than being held up while errors are chased down.

These two actions protect you against some of the highest-cost mistakes that can be made at year-end.

Action Seven: review your trust distributions before year-end. This is one of the most important — and most frequently overlooked — obligations for any business operating through a discretionary trust. The trustee must pass a valid distribution resolution before 30 June, naming the beneficiaries who are to receive the trust’s income for the year. If a valid resolution is not passed in time, the consequence is severe: the trust income is taxed at the highest marginal rate — currently 47 per cent. This resolution must be in writing and must comply with the terms of the trust deed. It takes very little time, but it is easily forgotten, and the cost of missing it is enormous.

Action Eight: contribute to a small business pool. Businesses eligible for the small business entity concessions can pool their depreciating assets — other than those already claimed under the instant asset write-off — and claim a single deduction for the pool’s diminishing value each year. Before year-end, review which assets are in your pool, and check whether any should be written off entirely because their value has fallen below the relevant threshold. Keeping the pool tidy simplifies your tax return and ensures you are claiming the maximum depreciation deduction available.

Our final two actions: the compliance trap to avoid, and the single most important action of all.

Action Nine: review your director and related-party loan accounts. This is the area known as Division 7A, and it is a significant focus area for the ATO. The rule is this: any loan made by a company to its shareholders or their associates must be either repaid, placed on a complying written loan agreement at the ATO’s benchmark interest rate, or declared as a dividend — and this must happen before the company’s tax return is due. If you do not comply, the ATO can deem the entire loan to be an unfranked dividend, taxed at the shareholder’s full marginal rate with no franking credits to offset it. The consequences are serious, so review all related-party loans before year-end.

And Action Ten — the most important action of all, because it enables every other action on this list: meet with your accountant now, not in July. Once 30 June has passed, most of the planning strategies we have discussed today are permanently closed. A meeting in April or May allows your accountant to model your estimated taxable income for the year, identify the strategies that will have the greatest impact for your specific situation, and implement them while the window is still open. This is exactly what Quantum House does — we provide proactive year-end tax planning meetings for all of our clients, well before 30 June.

Before we talk about how Quantum House can help, let me highlight the four most common — and most costly — EOFY mistakes that we see SMEs make. Every one of these is completely avoidable, but only with action before 30 June.

Mistake One: missing the trust distribution resolution. We covered this earlier, but it bears repeating because it is the single most expensive EOFY mistake. A discretionary trust that fails to pass a valid resolution before 30 June has its entire income taxed at 47 per cent. The fix takes minutes; the cost of missing it can run to tens of thousands of dollars.

Mistake Two: leaving super contributions too late. A concessional contribution only counts for this financial year if it actually clears the fund by 30 June. Every year, businesses leave this until the last few days, and the contribution is still in transit on the 1st of July — meaning the deduction is lost for the entire year. Allow at least a week.

Mistake Three: Division 7A loans left unaddressed. Related-party loans that are not repaid or placed on a complying loan agreement in time can be deemed unfranked dividends — one of the harshest outcomes in the tax system.

And Mistake Four — by far the most common — waiting until July to plan. By the time the tax return is being prepared after year-end, every single opportunity on this list has permanently closed. The solution is simple: plan in April or May, not July.

So how does Quantum House help SMEs make the most of the end of financial year?

First — and most importantly — we are proactive. Every Quantum House client receives a pre-year-end planning meeting in May or June, while there is still time to act. In that meeting, we model your estimated taxable income for the year and identify the specific strategies that will have the greatest impact for your business. Then we implement them before 30 June. We do not want to be the accountant who tells you in August about the tax you could have saved in June.

Second, we cover the full checklist. Every action we have discussed today — bad debts, prepayments, superannuation, asset write-offs, payroll tax, BAS reconciliation, trust resolutions, depreciation pools, and Division 7A — is systematically reviewed for your business as part of our year-end process. Nothing is left to chance, and nothing is forgotten.

Third, you work with a senior adviser directly — not a junior — on a fixed-fee basis agreed in writing before we start. There are no billing surprises, and our incentives are fully aligned with helping you achieve the best possible tax outcome.

To close — let me make this as practical as possible.

If you want to do any of the following before 30 June, now is the time to talk to Quantum House.

If you want to model your estimated taxable income and actively reduce it before year-end. If you operate through a trust and want to be certain your distribution resolution is valid and passed in time. If you want to maximise your superannuation contributions, including any catch-up cap room. If you want to bring deductions forward through prepayments and the instant asset write-off. If you have related-party loans that need to be addressed before they are deemed dividends. Or if you simply want to work with a proactive accountant who plans with you in April — rather than one who tells you about missed opportunities in August.

Quantum House provides pre-year-end tax planning meetings for all clients. The best time to have that conversation is now — well before 30 June.

You can reach us at quantumhouse.com.au, by email at inquiry@quantumhouse.com.au, or by calling our Sydney office on 1300 809 697.

Thank you for your time today. We look forward to helping your business make the most of the end of financial year.