11 last-minute EOFY tax tips

Mark Chapman, H&R Block

With just over a month to go until the end of the tax year, now is the time to be thinking about some last minute planning to maximise your refund for the year. So, what should you be doing as we head towards June 30?

Running your own business?

If so, look to utilise the $20,000 instant asset write-off. This allows you to claim an immediate tax deduction for all capital purchases costing less than $20,000, rather than depreciating the cost over several years, as used to happen.

This is great for tech items such as computers, tablets and phones, as well as tools and equipment for tradies, office furniture and even motor vehicles.

From 1 July 2016, this allowance is available to all businesses with an aggregated turnover of less than $10 million (previously it was only available to businesses with a turnover of less than $2 million) so tens of thousands of additional businesses can take advantage this year.

Also read: The biggest mistakes 31-year-olds make at tax time

Visit your rental property

In the recent Federal Budget, the Treasurer announced that from 1 July 2017, it will no longer be possible to claim a tax deduction for visiting rental 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 potentially tax deductible trip to your investment property, try to move it forward to this tax year.

Home Office

If you are in employment but work from home, either occasionally or all the time, and run a home office, you are entitled to deductions for costs arising from working at home. 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) which cost less than $300 can be written off in full immediately

With many retailers running End Of Financial Year specials, any purchases you make now can be deducted in your tax return from 1 July onwards so from a cash flow point of view, you can minimise the time between purchase and tax deduction!

Car expenses

If you use the log-book method, now is the time to check that your log-book is up to date and that you have all the receipts, invoices and records of journeys which you will need to calculate and substantiate your claim.

Also read: The beginners guide to income tax

Mobile Phone

If you used your personal mobile phone for work purposes, 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.

Charitable donations

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 the donation.

Prepay some expenses

You can claim a tax deduction this year for expenses which wholly or partly relate to next year. So, if you have some spare cash, consider paying things like union fees and professional subscriptions in advance in order to accelerate the deduction.

Gather written evidence

Make sure you have written evidence, such as receipts, invoices and bank or credit card statements, for everything you intend to claim.

Defer taxable income

This is worthwhile particularly if you are close to the top tax threshold of $180,000. If you’re expecting a bonus and have an understanding employer, it’s definitely worth considering.

Offset capital gains against capital losses

If you’ve disposed of shares or any other form of investment and you know you’ve made a capital gain, take a look at your investment portfolio and consider disposing of any assets which you own which you know are sitting at a loss. The resulting capital losses can be offset against the capital gain.

Be careful though if you sell shares sitting at a loss and then buy them back in the new tax year. The ATO takes a hard line against so-called “wash sales”. This refers to the sale of an asset before the year end and the purchase of a substantially identical asset immediately after the year end. The ATO regard the purchase and the sale as effectively the same asset and have issued a Tax Ruling which states that they can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties.

Seek expert help

Speak to a tax agent like H&R Block. They can identify exactly what you need to do to get into shape for the 2017 tax season and maximise your deductions.