There are a number of basic tax-related measures you can take to better position yourself in the lead up to end of financial year. Ensuring you are informed and have access to the right advice is critical for ensuring you properly leverage any tax opportunities available.
Further, being organised well and truly beforehand is paramount. In other words, trying to get your receipts and expenses in order at the final hour is never an ideal situation for you or your tax accountant. There is a multitude of programs and apps available to help you maintain your records throughout the year in order to minimise the admin stress in the lead up to end of financial year.
To help prepare you, we’ve put together a few key points to note about opportunities and changes that may impact and/or benefit you:
Private Health Insurance
Having private health insurance continues to forge a number of benefits, including but not limited to private health insurance rebate eligibility, avoiding the Medicare levy surcharge, and avoiding the lifetime health cover loading.
Pay Off Your Deductible Expenses
Where possible, pay your tax-deductible expenses in advance, rather than periodically throughout the following financial year. Doing so prior to 30 June 2018 allows the tax deduction to be brought forward to this financial year (2017-18). Owners of eligible small businesses should also know that the instant asset tax right off that was available in the 2016-17 financial year has been extended to 30 June 2018.
Defer Income Where Possible
If income can be deferred until the end of this financial year, this is advisable. On the other hand, if your tax rate is likely to be higher in the 2018-19 financial year, consider bringing it forward into the current financial year where possible.
If you’re just about to retire, consider prolonging it until the new financial year if you can. That way any lump sums owing to you, such as annual or long service leave, will be taxed in the new financial year and likely at a lower rate.
Tax Deductible Superannuation Contributions
As of 1 July 2017, tax deductions for personal superannuation contributions have become more accessible to a wider pool of Australians (particularly those under 65 or still in employment). If you’re interested in making personal contributions as well as leveraging the tax benefits, chat to one of us at Inovayt about which opportunities might be most suitable for you.
Changes And Updates
Net Medical Expenses Offset
The Net Medical Expenses Offset is in the process of being phased out, however, for costs associated with disability aids, aged care, and attendant aid, it is still available for the 2018-19 financial year.
Residential Rental Property Related Travel Expenses
Previously, investors who own residential rental properties were eligible for tax deductions relating to travel to inspect their investment property; these deductions were abolished as of 1 July 2017 and are no longer available.