The EOFY is creeping up on us but there’s still time to make a dent in your taxes.
Make a note of these top 10 tips.
Defer taxable income
If your taxable income exceeds $180,000, you are about to benefit from a 2% income tax cut. The 2% Budget Repair Levy, which has been around for three years, expires on 30 June, meaning that the top rate of tax (including the Medicare levy) will fall from 49% to 47%.
If you’re expecting a bonus and have an understanding employer, it’s worthwhile seeing if you can defer payment into the next tax year to take advantage of the reduced tax rate. The same goes for any other form of taxable income that you’re able to defer until post 1 July.
- Offset capital gains against capital losses
If you’ve disposed of shares or any other form of investment and know you’ve made a capital gain, take a look at your investment portfolio and consider disposing of any assets you own that you know are sitting at a loss. The resulting capital losses can be offset against the capital gain.
- Claim for your home office
Working from home as part of your job, either occasionally or all the time, and running a home office entitles to deductions for associated costs.
The expenses that you can claim include:
- Heating, cooling and lighting
- Cleaning costs
- Decline in value (depreciation) of home office furniture and fittings, office equipment and computers (for items over $300)
- Computer consumables, stationery, telephone and internet costs
- Items of capital equipment (such as furniture, computers and associated hardware and software) that cost less than $300 can be written off in full immediately
New rules come into force on 1 July 2017 that will prevent you claiming a tax deduction for visits to residential investment properties. Under the old rules, you could claim a deduction for travel expenses incurred in visiting your property where, for instance, you were undertaking maintenance, routine inspections or meeting your agent.
There is a short window between now and 30 June 2017 where the old rules still apply so if you were planning a potential tax-deductible trip to your investment property, try to move it forward to this tax year.
You can claim a tax deduction this year for expenses that wholly or partly relate to next year. So, if you have some spare cash, consider paying things like professional subscriptions in advance in order to accelerate the deduction.
Make a last-minute charitable donation. You can claim a deduction for donations of more than $2 to a registered charity provided you have a receipt for it.
If you use a bag for work, to carry papers or a laptop perhaps, you can claim a tax deduction for the cost. That could include a briefcase or a backpack, whichever suits your needs.
Using your personal mobile phone for work purposes means you can claim a deduction for the business-related use. Make sure you have your phone bills collected together and have kept a log of your business/personal use over a four-week period. That percentage can then be applied to the whole year.
Make sure you have written evidence, such as receipts, invoices and bank or credit card statements, for everything you intend to claim.
Speak to a tax adviser like H&R Block. They can identify exactly what you need to do to get into shape for the 2017 tax season, maximise your deductions and spot any tax planning opportunities.