Year-end tax planning
Tax time is here again and pressure is mounting.
Work-related purchases, donations and superannuation are key areas where people can boost their deductions by taking action now.
Prepaying expenses that relate to 12 months cover, before 30 June can create bigger deductions, - for example, professional memberships, professional journals and subscriptions, even insurance premiums for investment properties and income protection.
Prepay the costs of a conference later in the year.
Interest on investment loans can be another prepayment – and combine it with a reduced interest rate.
Need to buy something for your job or home office? Do it now.
Many people will be able to claim for a number of work-related expenses they wouldn’t otherwise have had to consider, such as home internet and items required for home office.
Donations to most legitimate charities are tax deductible – there are many, many deserving charities in need of help in this covid – ravaged year.
Many taxpayers can contribute up to $25,000 into their super this year – including employer contributions and salary sacrifice, but it must be well before end of June. The funds must be received and processed by the fund before 30 June, so do it as soon as possible!
Spouse contributions made for low-income partners is sometimes of benefit.
Using a logbook for 12 weeks to map your work-related car expenses in normal years can be the biggest tax deduction. But this year might calculate a higher percentage because there has been such limited holidays or private use because of lockdowns ( Melbourne taxpayers particularly) out of the total travelled this year.
Many people only claim the cents a kilometre method of 72 cents for up to 5000km travelled, but often cars can deliver bigger deductions, once petrol, maintenance, insurance and other costs are combined, with a log book.
Invest a few moments now, to save more than a few dollars at tax time.!