June 30 is rapidly approaching and with every dollar counting during this COVID-19 pandemic, now is the time to do some urgent tax planning.
Here are five tips for you to maximise your tax refund this year.
1. Fill out your car log book
If you use your car for work purposes, keep a 12-week log book. Make sure that you keep all costs associated with the running of your car for the whole year, not just the log book period.
2. Super top up
No matter your income level, superannuation is a great tax reduction tool. Contribute up to $25,000 into super. If you earn under $38,564 take advantage of the Superannuation Co-Contribution by putting in $1,000 with the government matching it by half. Free money! Also, if you earn less than $37,000 your spouse can put up to $3,000 into your super and they will receive the 18% spouse contribution rebate.
3. Prepay and claim this year
Expecting a lower income next year? Bring forward your deductions into this tax year. Stocking up your home office with stationery, laptops and printers or prepaying subscriptions and interest on rental properties for up to 12 months in advance are simple ways to reduce your income before 30 June.
4. Clock-in working from home
With so many working from home during COVID-19, this is one claim that will skyrocket in 2019/20. Whilst you can use the ATO’s shortcut method of 80 cents per hour it will probably be less than actual deductions for the work-related portion of home telephone, internet, stationery, printers, computer equipment and consumables together with the 52 cents per hour claim for electricity under the fixed costs method.
5. Buy a new business asset < $164,999
No greater tax concession in recent years for small businesses than the $150,000 immediate write-off for new business assets. Apart from motor vehicles (where it is limited to the business portion of the car limit of $57, 581), there is no limit to the amount of assets that you can purchase but beware you only get a percentage back and cashflow may suffer. The threshold effectively is $165,000 for those that are GST-registered as a 10% GST credit is claimed in quarterly Business Activity Statements.
This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.