7 Tips For Getting Your SMSF Ready For Tax Season

January 12, 2023    Tax Return Perth

Self-managed super funds (SMSFs) have become increasingly popular in recent years. As more and more people look for ways to take control of their retirement savings. However, with great power comes great responsibility, and SMSF trustees have several obligations to fulfil, including filing an annual SMSF tax return. As another financial year is on the edge of end very soon, as a trustee you should manage your fund and make SMSF tax ready.

Easy Tax Tips for SMSF 2023

1. Keep accurate records

SMSF trustees are required to keep accurate records of all transactions and investments made by the fund. This includes keeping records of all contributions, withdrawals, and investment income and expenses.

Get an ABN and TFN: SMSFs are required to have an Australian Business Number (ABN) and a Tax File Number (TFN). If your fund does not already have these, you will need to apply for them before you can file your tax return.

2. Understand investment property tax benefits

If your Self-managed super funds hold an investment property, there may be tax benefits available. This may include deductions for expenses such as loan interest, council rates and building insurance. Make sure you understand what tax benefits are available to your fund and claim them on your return.

Get advice on tax: SMSF trustees have several obligations to fulfil when it comes to tax, and getting tax advice can help ensure that your fund is compliant and that you claim all the deductions you are entitled to. Consider seeking advice from an accountant or tax agent that specialises in SMSFs.

3. File your tax return online

Many tax return preparation software now allows you to file your return online, which can save you time and make the process more efficient. Additionally, you may also consider using specialised software for Self-managed super fund tax returns and Investment property tax returns Perth if you hold them.

4. Audit your Self-managed super funds

An annual audit is mandatory for all SMSFs, and the auditor must be a registered SMSF auditor. The auditor will check that the fund is compliant with all superannuation laws and regulations, including ensuring that all investments and transactions comply with the fund’s trust deed and investment strategy.

The auditor will also review the fund’s financial statements and prepare the SMSF annual return, which must be lodged with the Australian Taxation Office (ATO) by the due date.

5. Lodge your tax return on time and also stay updated with the laws and regulations

SMSFs must lodge their tax return by the due date to avoid penalties. The due date for lodgment is generally the same as the due date for the fund’s annual financial statements. It is crucial to keep in mind that the due date for lodgment may be different for certain SMSFs such as those with early or non-standard balance dates.

The law and regulations surrounding SMSFs are subject to change, and trustees need to stay informed about any changes and how they might impact the fund.

6. Keep in mind the penalties and track of contributions

If the SMSF doesn’t comply with the superannuation laws, the ATO can impose administrative penalties on the trustees, which can be substantial. If the SMSF doesn’t lodge the annual return on time, the ATO can also impose a penalty on the fund. Therefore it is crucial that SMSF trustees keep accurate records, understand the tax benefits available to them, and comply with all their obligations to the ATO.

SMSF trustees need to keep track of contributions made to the fund, including the type of contributions (concessional or non-concessional) and the caps that apply to each type. Trustees also need to ensure that they don’t exceed the annual and lifetime caps on contributions, as this can result in additional tax and penalties.

Review the SMSF’s pension and benefit payments: SMSFs are allowed to pay pensions to members who have reached preservation age and benefits to members who are eligible to receive them. Trustees need to ensure that they understand the rules and conditions that apply to pension and benefit payments, such as the minimum pension amount and the pension transfer balance cap.

7. Understand the SMSF borrowing rules

SMSFs are allowed to borrow money to purchase certain assets, such as real property, under specific conditions. These conditions are known as the “Single Acquirable Asset” and the “Limited Recourse Borrowing Arrangement” rules.

Trustees should seek professional advice and make sure they understand the rules and limitations of SMSF borrowing before entering into any borrowing arrangements.

Understand the rules on SMSF wind-ups and mergers: SMSFs can be wound up or merged with another SMSF under certain circumstances. Trustees should understand the rules and procedures for wind-ups and mergers and seek professional advice if they are considering these options.

Here are some of the other points that you need to review

1. Review your fund’s investments

Before you file your tax return Perth, you should review your fund’s investments to ensure that they comply with the investment strategy set out in the fund’s trust deed. It is vital because if the investments do not comply with the strategy, the fund may be non-compliant and subject to penalties.

2. Collect all necessary documents

Collect all necessary documents such as bank statements, investment statements, invoices and receipts for any expenses. This will make it easier for you to complete your tax return and will also ensure that you claim all the deductions you are entitled to.

3. Review the SMSF trustee’s Annual Declaration

The trustee of an SMSF is required to complete an Annual Declaration each year to confirm that the fund is complying with the superannuation laws. This must be completed and signed by all trustees and submitted to the ATO with the SMSF annual return.

4. Review the SMSF’s compliance with the sole purpose test

The sole purpose test is a fundamental principle of SMSFs, which states that an SMSF must be maintained solely to provide retirement benefits for its members or their dependents. Trustees must ensure that their SMSF’s investments and activities align with this test and that they do not use the fund for any other purpose.

5. Review the SMSF’s reporting and notification requirements

SMSFs have several reporting and notification requirements for the ATO. Trustees should ensure that they understand these requirements and that the fund is meeting them. If you fail to do it then get ready to face the consequences.

6. Review the SMSF’s spending and budgeting

SMSF trustees should review the fund’s spending and budgeting at least once a year to ensure that it is on track to achieve its goals and that the fund has enough money to meet its obligations. This includes reviewing the fund’s income and expenses as well as its current and projected cash flow.

7. Review the SMSF’s trustee responsibilities

SMSF trustees have a legal responsibility to manage the fund in the best interests of members which includes complying with all superannuation laws and regulations.

Trustees should ensure that they understand their responsibilities, which include but are not limited to complying with the sole purpose test, keeping accurate records, ensuring that the fund is audited annually, and lodging the annual tax return on time.

8. Review the SMSF’s insurance coverage

SMSFs are allowed to provide death and disability cover for members, this can protect members, but trustees need to ensure that the coverage is adequate and that the cost is reasonable. Trustees should also ensure that they understand the rules and regulations regarding SMSF insurance and that the fund’s insurance arrangements comply with them.

9. Review the SMSF’s investment strategy

SMSF trustees should review the fund’s investment strategy at least once a year to ensure that it continues to be appropriate and that investments are aligned with the strategy.

This is important because the investment strategy must be by the fund’s trust deed and must be designed to provide retirement benefits to the members. The strategy should also take into consideration the fund’s overall financial position and the individual circumstances of its members.

10. Keep records of the SMSF’s trustees, members and beneficiaries

SMSF trustees should keep records of all trustees, members and beneficiaries of the fund, and ensure that they are updated when there are any changes. They also need to keep copies of each member’s death benefit nomination forms and ensure that they are valid.

11. Consider seeking professional advice

SMSF trustees have a legal responsibility to manage the fund in the best interests of members. While the above tips can help trustees get their SMSF ready for tax season, SMSF trustees are encouraged to seek professional advice if they are unsure about any aspect of their fund’s operations.


By considering these additional tips and considerations, SMSF trustees can ensure that they are managing the fund in the best interest of its members while also ensuring that the fund is compliant with all laws and regulations.

Always seek professional advice if there is any uncertainty and stay updated with any changes in laws and regulations. SMSF trustees have a big responsibility in managing the fund and making sure it complies with laws and regulations.

By keeping these tips in mind, SMSF trustees can better prepare their fund for tax season and ensure that it is operating in compliance with all laws and regulations while also working towards achieving the best outcome for their members and beneficiaries.

Read more: Reasons to Hire SMSF Accountants for Your SMSF Tax Return

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