Getting your financial house in order for the new year

With the arrival of the new year, and an extended summer break about to get under way for many people, now is a great time to take stock of your financial affairs, look to the year ahead and put a plan in place to improve your budgeting and financial planning.

Taking a look at the tax system is an important part of that, so what do you need to know about the year ahead in tax that you can use to your advantage?

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All taxpayers

It might seem a little early to worrying about tax time just yet, but now is the time to be ensuring that your tax records are up to date. If you drive your car for work, cover more than 5,000km’s and want to claim a tax deduction, you need to ensure you have a logbook in place to record your journeys. If you don’t have one, the return to work in January is a good place to start. The logbook needs to cover a 12 week period so starting in the new year will ensure the logbook is complete well before the end of the tax year.

In addition, make a concerted effort over the next six months to keep all tax records (including invoices and receipts) in a safe place. If you’re well organised now, it will pay dividends at tax time.

Small businesses

With so many public and staff holidays, not to mention long hours in the office in the run up to Christmas, it be easy to overlook the payment of taxes such as GST as well as superannuation.

Don’t forget there is a BAS due in February (complete with GST payment) and a Super Guarantee payment due 28 January so no matter how tight your cash flow over the festive period, set aside adequate funds in a holding account, and don’t dip into it. The ATO does not make a friendly creditor!

Finally, if you run a small business, there’s a key change coming up later in 2018 that you need to be aware of.

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The highly popular $20,000 instant asset write-off scheme is scheduled to end on 30 June 2018. This allows small businesses to purchase items of capital equipment and claim an immediate tax deduction if the cost of the item is less than $20,000.

Having already been extended for one year longer than expected, it looks like the tax break will be allowed to lapse and won’t be extended again. As such, it makes sense to make any qualifying capital purchases between now and 30 June, just in case.