2026 Tax Planning Season
Written by Ellie Carp and Lili Hoare - Accountants.
With 30th June 2026 very fast approaching, Fenwick Collective will not be gatekeeping any tax saving tips and strategies this tax planning season!
Our team have prepared a cheat sheet for you:
NEW TAX STRATEGY RE: ATO DEBT
ATO interest on overdue debts is no longer tax deductible from 1 July 2025 (and also currently the interest rate is 10.65% - spicy!). It is important to consider either paying debt off in full or refinancing (e.g. either with a new loan, or even as part of a home loan refinance). Depending on the circumstances, this may or may not allow for the new interest to be tax deductible and will also likely be a lower interest rate than the 10.65% offered by the ATO.
TAX STING - SALE OF ASSETS PREVIOUSLY 100% WRITTEN OFF
Until 30 June 2023, many businesses were able to claim 100% of assets purchased under the temporary full expensing or instant asset write off tax laws. This means though when these assets are eventually sold, 100% of the sale amount received for it will be included in your income for the year, and any replacement asset you buy will generally be depreciated if it is $20,000 or more. So, if you're planning to sell an asset or trade in a vehicle for a new one, we may need to carefully plan for extra tax payable!
$20K INSTANT ASSET WO IN EFFECT TILL 30 JUNE 2026
With Labour winning the election last year, we got the beauty of the instant asset write off (IAWO) extended till 30 June 2026. However, we have had no news as to whether this scheme is continuing into the 2027 financial year.
This means we may only have a few more months to utilise this tax break for assets that cost between $1,000 and $20,000. After the scheme ends, small businesses will have to depreciate any asset purchases over $1,000.
ATO FOCUS AREA
It is now more important than ever before to keep proper tax records. This includes:
receipts for all deductible items
motor vehicle logbooks showing business vs private usage
supporting evidence for claiming reasonable travel and meal allowance (i.e. proof of expenditure of the allowance)
home office expense diary (internet usage/WFH hours)
phone usage diary
travel diary
DIRECTOR LOANS (“DIV 7A”)
Business owners who have borrowed funds from their company in previous years need to consider how the ATO's Division 7A rules apply to them (with our guidance). If these are not paid back in full we need to put a loan agreement in place with appropriate principal and interest repayments.
A repayment can be in the form of physical cash, a dividend paid to shareholders, or wages/contractor fees paid to the owners. Paying only the minimum amount every year is essentially kicking the tax bill down the road BUT with the current individual tax rates staying the same and lower than previous years, we think this year is a great opportunity to put a healthy dint in these loans!
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If possible, defer issuing further invoices and receiving cash/debtor payments until after 30 June 2026. This strategy pushes tax payable to future years. Please note, QBCC clients needing certain asset levels may need to reconsider this.
Make note of the value of your stock on hand or work in progress (if applicable) at 30 June. Review your listing and write-off any obsolete or worthless stock items. Talk to our team about your different options for valuing Stock, and how they affect your tax payable.
Write off any outstanding invoices you are unlikely to receive payment for (bad debts).
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Purchase consumable items BEFORE 30 June 2026. These include marketing materials, consumables, stationery, printing, office, computer supplies, yearly insurances. Spend the money now and get the deduction this year.
Consider if wages or a contractor fee will need to be paid to a spouse (or related party) for administration work they have been supporting you with throughout the financial year. For example, Amy runs a digital marketing agency and has her spouse Sam help with her bookkeeping in Xero. Amy pays Sam on a contractor basis for the hours he helped with in the 2026 FY. This is a tax-deductible expense to Amy and is income to Sam.
Consider contribution to a charity that is close to your heart before EOFY for an extra tax deduction.
Consider an electric vehicle to maximise the tax benefits around FBT
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Consider restructuring your business. For example, are you a sole trader with increasing profits? If so, now is the time to ask the question about what a company would mean tax wise for your business and how you may benefit.
Do you have any business loans? Make sure you have the documents for these so that the interest can be claimed in your tax return.
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Maximise deductible super contributions. To claim a tax deduction in the 2026FY, you need to ensure that your employee superannuation payments are received by the super fund or the Small Business Superannuation Clearing House (SBSCH) by 30 June 2026. We suggest pre-paying any superannuation guarantee for the April 2026 to June 2026 quarter before 15 June 2026.
Organise staff bonuses to be processed through payroll prior to 30 June 2026.
Update budget/cashflow considerations from 1st July 2026 for the new payday Super requirements.
Get your Workcover declarations ready.
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Make voluntary superannuation contributions (but make sure you do this before the deadline of 15 June 2026)
Contribute more than the annual cap of $30,000 by considering your unused carry-forward amounts from prior years. Unused amounts are available for a maximum of 5 years and expire after this. For example, a 2020–21 unused cap amount that is not used by the end of 2025–26 will expire.
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The first home super saver scheme (FHSSS) allows you to make voluntary contributions into your super fund to help you save for your first home. As these contributions are made into your super fund they are treated as a tax deduction.
If you own a rental property and haven’t already done so, arrange for the preparation of a Property Depreciation Report to allow you to claim the maximum amount of depreciation and building write-off deductions on your rental property.
Start collecting all your rental property receipts. The ATO is heavily scrutinising rental properties so making sure we have all the receipts for this is crucial.
We’ve opened our calendars from February to June for clients to book in for tax planning, and we’re offering the following options depending on your budget and requirements:
BRONZE - Tax plan report with email commentary and advice
SILVER - Tax plan report with 45 minute consult
GOLD - Tax plan report, a 12-month budget/cashflow forecast for the 2027 financial year with a 60 minute consult
Request a quote below:
If you’re not quite ready to book in yet but have questions about getting prepared for the new financial year (think hiring staff, setting up Xero properly, or understanding how much tax you should be setting aside), we’re always happy to help. Reach out via the contact details below!
📧 hello@fenwickcollective.com.au
📞 07 5630 1586
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountant.