- Pay your superannuation liability for employees before 30 June (must be received by the super fund before 30 June). The June quarter payment is due by 28th of July anyway, so why not bring the deduction forward to the 2019FY.
- If you have some spare cash, consider making a concessional super contribution to your superannuation account. Make sure you don’t contribute more than $25,000 for the year (from all sources).
2. $30,000 asset write off
Take advantage of the $30,000 asset write off by bringing forward any new asset purchases to before 30 June.
3. Are there deductions you are missing out on?
Speak to your Tax Agent about any deductions you might be missing out on. For businesses running their office from home, you can claim running costs such as electricity, water, phone and internet.
4. Income Protection
Not only could Income Protection insurance help you manage your expenses if you are unable to work due to sickness or injury, it is also tax deductible.
5. Plan for tax payments
Ask your Tax Agent to do an estimate of your tax payable for your 2019 tax return. You might be able to vary your June PAYG Instalment down (and keep the cash in your hands) or you might have to start putting money away to make sure you aren’t caught out with a big tax bill.
Lots of friends and family ask me at this time of the year if they should buy tools, make donations or spend money on other deductions to reduce their tax. What they don’t realise, is they do not receive the full dollar for dollar benefit of the money they are spending. For example, if you have a taxable income of $80,000 and spend $5,000 on tools to reduce your tax payable, the reduction in tax (including Medicare levy) you receive is $1,725. In terms of cash, you are $3,275 out of pocket. If you don’t need the tools and could put the money to better use (like a house deposit), you need to consider what is really the right thing for you to do.
If you have a HECS or HELP debt, reviewing the repayment thresholds could majorly impact your tax payable or refundable. I know myself, if I am close to the lower end of a repayment threshold, I will spend money on in order to reduce the repayment. For example, if you have a taxable income of $52,000, your HECS repayment would be $1,040. If you spend $100 on deductions, your HECS repayment decreases to $nil. So, you spend $100 to save $1,040. Yes, HECS must be paid back at some stage but if I know I am going to have a tax payable, I would prefer to defer the payment to next year. You can find the repayment thresholds here: https://www.ato.gov.au/Rates/HELP,-TSL-and-SFSS-repayment-thresholds-and-rates/
This is information is general information only and does not constitute financial advice.