EOFY is nearly upon us and it’s time to think about other ways to increase your tax return by reducing your overall taxable income. But don’t despair, here at Wealthy Self, we’ve put together some useful tips that our clients are starting to think about, to help you prepare for your year-end planning. Or what we like to call, End of financial Yee-Haa!
So whether it’s digging out all those coffee meeting receipts or thinking about your long-term health, there’s usually something you can do before 30 June to help decrease your assessable income that could otherwise be taxed.
The following is a list of some things Wealthy Self clients are doing to reduce their taxable income:
Pre-pay deductible expenses
If you have tax-deductible expenses, consider paying them before 30 June in order to feel the benefits this current financial year; i.e, if you’re going to be taking parental leave next financial year and you have an Income Protection Insurance Policy outside of Super, you may be able to prepay the next years premium now instead of next financial year when you’ll be on leave.
Superannuation contributions (Salary Sacrifice & Personal Deductible)
Since 1 July 2017, you can make a personal deductible contribution into Super and claim a tax deduction. Keep in mind that contributions are subject to limits so book in a free chat with us to discuss this further.
Fees for advice services
If you’re working with a financial adviser like Wealthy Self or an accountant, it’s possible that a portion of the advice service fee may be deductible, if it relates to an ongoing service agreement which is funded personally (i.e not from Super). Chat with your adviser or accountant to get the details to see if this is applicable for you.
Private health insurance
For some people, purchasing private health insurance before 30 June could have a few benefits including:
- Being eligible to receive the private health insurance rebate
- Avoiding the Medicare levy surcharge
Eligibility and terms apply so check the small print carefully when deciding which private health insurer will best suit your needs.
Education costs or office supplies
Have you purchased work coffees? Have you personally paid for office stationery? Do you use your home computer for work, have an industry specific magazine subscription or have you paid for an online course specific to your work? If you’ve got the receipts or invoices you may be able to claim tax back on any item you have personally paid for that you’ve used for work. Hurrah! Scroll through your emails and check your wallet and give them to your accountant!
Car allowance
If you use your car for work, then you may be eligible to claim a portion of your car expenses such as petrol and insurance, but make sure you keep an accurate record of your receipts, work trips and mileage to get this tax back.
Interest on investment loans
Do you have an investment loan? Whether it’s a loan for your investment property or to buy shares, the interest and a range of expenses related to the interest on investment loans could also be tax-deductible.
Donate to Charity
Feel good, do good and get tax back, it’s a win-win situation! In Australia, all donations over $2 made to a registered charity are tax deductible. The charity must be a “deductible gift recipient organisation” which means they have DGR status 1 or 2. Most charities will advertise on their website that donations made through them are deductible but if in doubt, check their website FAQs. Now make a list of the causes you care about and start donating! Just remember to keep the receipt or if you’re a monthly giver, ask for your end of financial year tax receipt.
Now you’re well on your way to getting EOFY ready! This is a general snapshot of things you might be thinking about as you approach the end of the financial year. If you have questions about any of the issues raised, or if you would like to simply check that everything is on track, please don’t hesitate to contact me.
Please note that we are not accountants and this article contains general advice only. Please contact your accountant to see what is appropriate for your situation or contact Wealthy Self for recommendations from our trusted community.
General Advice Disclaimer
This blog contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making any strategy or product decision. InterPrac Financial Planning Pty Ltd and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this document except for liability under statute which cannot be excluded.