EOFY – 5 Tips and Tricks
The EOFY end of the financial year is fast approaching and everyone will be bracing for their taxes to come out of what they have earned over the last 12 months. Join us in today’s podcast as we run through 5 tips and tricks to help you at tax time.
Contribute to Your Super
The limit on super contributions has increased recently, so the first tip is to whack in the maximum if you can afford to. As a deductible expense, you can get a tax deduction on your super contributions, ultimately retaining more money in the long run. In times like these where the economy is quite tricky, you need to ensure that you are planning for retirement and preparing your super for the future. The alternative for many is to pour the money into their business to try and grow, which is all well and good so long as this sets you up for retirement as well. In essence Host Andrew Baxter offers this suggestion – use your super to your advantage and set yourself up for the future.
Pre-Paying Your Obligations
If you have company expenses and company credit cards, they may be due sometime after June 30. Host Andrew Baxter’s suggestion – consider paying it off in this tax year so you get the tax deduction faster. Inflation only harms you if you delay paying off these obligations because the money you can gain in deductions today is worth a lot more than it will be worth next year. The best way to ensure this is possible is to be organised and take the necessary action steps in the days prior to and not leaving it down to the wire. Sometimes if you try to cram in a transaction on June 30 you will find the transaction does not clear until the next month, and as a result you will have to wait a whole year for your next opportunity to capitalise on that tax deduction.
Instant Asset Write-Offs
Being aware of what you are entitled to write off come tax time is vitally important, but it’s not always easy to understand what needs to be done. Though this is a challenge in and of itself, the real challenge is finding good accountants to provide accurate advice. Host Andrew Baxter suggests really focusing on searching for a good accountant who is capable of helping you. This does not mean finding someone who is going to suggest cutting corners and acting shady, but someone who can decipher what you are entitled to ensuring you don’t miss out. For a few examples, many people often overlook that they can get a deduction on their tax bill for their income protection. We all would benefit from solid professional advice and doing so takes many risks and possible mistakes off the table.
Hold Onto the Paperwork
This is a very simple one that is often overlooked. Technology now offers simple solutions for doing this. Companies like Xero provide the platform for you to simply download digital statements that can be stored forever. No longer do we need an archive box with thousands of documents so long as we keep everything tidy and accessible. Once again, Host Andrew Baxter’s main advice – be organised in advance. In Andrew’s case, as a financial services business owner, audits are always at the forefront of a new financial year (EOFY )and he likes to be fully prepared ahead of time so that he can get it out of the way and move on. One particular piece of advice is to obtain the depreciation report on any property you might have from a surveyor.
Like with anything, you will always thank yourself for getting your ducks in a row ahead of time, and the EOFY is no exception. Some parting advice from your Host Andrew Baxter – get organised and find a good accountant to help you at tax time. Although it mightn’t always lead to a huge saving, they all add up.