There’s a celebration coming, party people. Empty your receipts out of that shoebox, install fresh batteries in your calculator and put the cask wine on ice…
Numbers nerds around the country are prepping for the most exciting day on their calendars – the end of the financial year is almost here! But before you get drunk on digits, there are a few tips you can use in the coming weeks to ensure you are best prepared for the accountancy par-tay of the year.
Deciphered directors Monique D’Castro and Libby Swanson run a Gold Coast-based consultancy helping people understand their digits. While Monique says you should not consider your financial position only once a year right before EOFY (as it should be an ongoing consideration), whether you have a small business or are prepping an individual return, it’s not too late to put a few plans in place to get the best result possible on June 30.
The philosophy at Deciphered is one based on collaboration. With so many facets to even the simplest financial position (depending on your circumstances), the team collaborate with other likeminded business professionals to provide the best all-round recommendations.
Monique says fellow Gold Coast allied accountants Evolve Business Advisory offer some great online articles that put detail into claiming expenses for vehicles and other home office deductions.
When thinking about spending in the lead up to EOFY, Lauren and Cameo of Evolve remind us that immediate deductions can be claimed for most work-related assets under $300. Think tradies’ tools, calculators, briefcases (or handbags where their purpose is to carry laptops etc) computer gear and technical books. And don’t forget that self-education expenses may be deductible if the study is directly linked to your employment.
“June is the time to consider pre-paying expenses such as interest on tax-deductible debt, or other deductible expenses like subscriptions and memberships or professional association fees, if your cash flow will allow it,” Lauren says.
While other typical work-related expenses include your employment-related mobile phone, Internet, computer repairs and union fees, it can sometimes pay to think outside the box.
“Depending on your industry, many people overlook the potential of claiming things like sunscreen, home office electricity, printer ink, stationery, work boots, work-related journals and magazines. Even a portion of the cost of doing a load of washing can be claimed if you have a uniform you wear for work,” she says.
If you’re lucky enough to own an investment property, now is also the time to consider minor repairs and maintenance. Any minor capital items under $300 can be immediately deducted.
FOR SMALL BUSINESS
For business owners, a little bit of thought and preparation in the next weeks can go a long way before the popping of EOFY champagne corks.
“Look at bringing forward expenses like repairs and maintenance or prepaying monthly costs such as rent, electricity and utilities,” Monique says. “Specifically, if your cash flow allows it, seek to pay all those July-due bills before June 30.”
This also applies to your June quarter Superannuation Guarantee Charge for employees. Normally due by July 28, Monique’s tip is to pay this before June 24 to ensure that payments are received by superannuation funds prior to June 30 to receive the deduction for this financial year.
Libby reminds small businesses owners that they can get an immediate tax deduction for nearly all individual assets purchased before June 30 that cost less that $20,000 (ex GST), provided the asset is to be used for an income-producing purpose.
“2017 Budget announcements have seen this small business incentive extended beyond its previous expiry date of June 30, 2017, which is an added bonus,” Libby says.
As far as income goes, where legitimately possible, Monique also suggests holding over invoicing to defer income until after June 30. But take note: The ATO has some clear lines drawn regarding this, so seek advice.
RI Advice Gold Coast’s Marcel Jacobs, a valued Deciphered ally, says now is also the best time of the financial year to review your Income Protection cover or set it up for the first time.
“The premium for Income Protection is generally tax deductible,” Marcel says. “By paying your annual premium upfront, you are likely to get a discount on the premium and get a portion of the premium back in the form of a reduced tax bill or tax refund in the next few months.”
Marcel also encourages the self employed to top- up superannuation, if cash flow allows.
“Many self-employed people can make a last- minute decision to top up super and claim a tax deduction at the same time. It’s important however that you seek advice on the right type of contribution, the right amount and net tax benefits, if any,” Marcel says.
Of course, the Deciphered team encourages haven readers to always seek professional advice.
“The time and money spent investing in the services of a good bookkeeper, accountant or advisor or, even better, a great team of these three, is often an investment that pays back in both time and money saved,” they say.