As seen in Woopi News June 2022
With 30 June fast approaching tax deductions are no doubt on a lot of people’s minds. Whether you are an employee, investor, or business owner it’s always important to remember that when you spend money to save on tax you are only ever going to get a percentage of the money back, as either reduced tax payable or a larger refund. Consider if the expense will be claimed in full, or will it need to be depreciated (claimed over a few years), which could make a big difference to your tax position.
If your business is operating on a cash accounting basis i.e. you include income received and expenses paid when you do your tax return and exclude bills and invoices that are unpaid. If your profit is higher this year, consider if any of your expenses can be prepaid before 30 June. If you are accounting on an accrual basis, ensure all your business bills are entered into your bookkeeping software before your tax return is done to receive the benefit of those creditors.
If your taxable income is tippling into the next tax bracket or you have experienced a large capital gain perhaps from the sale of an investment property pushing your income higher than usual. Perhaps making a deductible superannuation contribution is something to consider. There are opportunities this year to access unused cap space from prior financial years on top of this year’s contribution caps. Not everyone can make contributions to superannuation there are upper age limits and limits on how much you can put in each year. It is important to seek advice to make sure a superannuation deduction is available to you before you put money in, remembering that once you put the money in it’s generally inaccessible until you reach retirement.