End of financial year is almost upon us, and as always there is a frantic rush to maximise on the year and minimise on tax.
With almost every business throwing ‘EOFY’ sales, the most common thing heard at this time of year from every salesperson is “but it is tax deductible, and it’s almost the end of the tax year”.
Getting 39% tax back on something, still costs you 61%! If you don’t need it you just end up being 39% worse off! (assuming your tax rate is 39%).
The number 1 rule is if you otherwise wouldn't need it, don’t buy it just for the tax deduction!
That being said, below are a few tips and tricks for you to make the most of the EOFY.
As always, the information in this post is of a general nature only and does not take into account your personal situation and circumstances. Speak to your accountant or get in touch with me to get personal advice in order for you to make the right decisions.
Donate to a charitable organisation
This may not benefit you directly, but not only is donating a taxable deduction, you actually get to some good at the same time.
Take out income protection
If you have been considering getting this for a while (and even if you haven’t), the end of the financial year is the best time to take cover out, as it’s tax deductible – so not only is it a good idea to cover your income, you also get your refund back sooner rather then later!
Boost your super!
There are a number of different strategies to consider here – as always make sure you take your own goals and situation into account before putting money into super – once it’s in, you’ll have to wait to get it out! Also, make sure you use the right codes, or necessary forms when contributing!
Consider a Tax deductible contribution
If you are an employee – you can make a personal deductible contribution, instead of having to salary sacrifice all year. If you are self-employed, you’ve always been able to do this. Note, the contribution caps are $25,000 for this financial year, and that includes what your employer puts in.
Consider a Non-Concessional contribution
This is with money you have already paid tax on, and you are not claiming a deduction for.
You can contribute up to $100,000 per year, and in some cases $300,000 using the bring forward rule (please get advice first).
Get free money from the government
If you have employment income of less than $36,813 this financial year and make an after-tax contribution to super of $1,000, the government will match 50c in the dollar, up to $1,000 – so you may be able to get a free $500 from the government! This tapers out once you earn $51,813.
Boost your spouses super for a rebate
If your spouse earned less than $37,000 this financial year, you can claim a tax rebate of up to $540 if you contribute on their behalf. Contribution maxes out at $10,800.
This can also be a great way to balance your super amounts. Watch out! This contribution is not deductible. There are a few other rules you have to check, so speak with your accountant or give us a call first.
If you have an SMSF
Make sure you have reviewed your funds investment strategy, member insurances and completed your tax return!
These are all annual requirements of trustees and there can be harsh penalties if you don’t complete them each year!
Ensure the correct pension payments have been made – there are minimum amounts depending on your age.
Get it right!
Speak with an accountant about information regarding preparing to complete your tax return. They can help you identify what is deductible and the consequences if any of claiming these areas.
If you don’t have one, get in touch and we’d be happy to refer you to a fantastic accountant!
Get Financial Advice!
There is no time like the present to finally get some advice about setting your finances in order and working towards your future goals.
At lime financial planning we provide you with education, advice and service to help make the most of your finances, so you can focus on what is important to you.
Get in touch at Nathan@limefinancial.com.au if you have any questions.
DISCLAIMER: The information contained within our website is of a general nature only and has been provided without taking account of your objectives, financial situation or needs.
Because of this, you should consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.
Before making any decisions to change your taxation situation, seek professional tax advice.