Prepare for the 30 June Deadline – Act Now!

When it comes to maximising your annual tax return, there are numerous factors to consider. We’ve identified several strategies that could unlock opportunities for tax savings.

The key is proactive planning.

Reduce your tax liability through deductions

Pay for upcoming expenses in advance

If you have surplus funds available, paying certain expenses before June 30 could mean receiving your tax refund from the ATO sooner. Expenses paid in July might delay your return by over 12 months. A common tactic in this realm is prepaying interest on an investment loan, but exercise caution as not all expenses qualify for advanced tax deductions.

This year, the ATO is scrutinising work-related expenses. If you plan to claim expenses for items like a home office, mobile phone, tools, and equipment, ensure you only claim eligible expenses and have supporting documentation.

Claim insurance premiums for income protection

You can claim a tax deduction for the premiums paid on your income protection insurance. However, you can only claim the portion covering loss of income, not benefits of a capital nature. Premiums for other personal insurance policies, such as life, critical illness, or trauma, cannot be claimed. Additionally, you cannot claim deductions for premiums paid from your superannuation contributions if your policy is held within your fund.

Maximise your superannuation contributions

June 30 is not solely about expense deductions. It’s also an opportune time to review your superannuation contributions and take advantage of the annual caps.

Concessional contributions (salary sacrifice)

The annual limit for these tax-deductible contributions is $27,500, regardless of age. For employees, this limit encompasses employer super guarantee and salary sacrifice contributions.

Assess how much your fund has received in contributions so far this year. Do you need to review and adjust your current arrangements?

One final point on super contributions – the total contributed is based on when your fund receives the funds, not when you sent them. Another reason why advanced planning is crucial.

*Be mindful that if you breach this cap for concessional contributions, there are tax penalties, so ensure you seek professional advice from your accountant or financial adviser if you’re unsure of how much to contribute.

Conclusion

These are just a few ways to manage how your money is taxed. Depending on your circumstances, other options may be available. Your licensed adviser can work with you to help you achieve the best outcome for this financial year. But please don’t delay taking action.