EOFY 2019- Hints and Tips
It has been a while since I have posted a blog. We have been very busy because the current financial year is fast coming to a close.
The end of financial year is always a great time to look to see if there are any moves you can make to improve you tax position or to make the most of deductions available to you.
Here are some hints, tips and reminders that may help you plan your finances for the EOFY.
-Pre-pay deductible expenses– if you have expenses that are tax deductible, consider paying them before 30 June in order to bring forward your tax deduction to the current financial year. Also, if you run an eligible small business, the instant asset tax write-off that was available in past financial years has been extended to 30 June 2019.
-Residential rental properties – travel expenses– for investors that have residential rental properties, the tax deduction for travel expenses to inspect the property was abolished from 1 July 2017.
-Defer income– where possible consider deferring income until after the end of the financial year, or where your tax rate is likely to be higher in the 2020 financial year, consider bringing income forward to the 2019 financial year.
-Planning to retire, or stop working?– if so, consider deferring your plans to stop working until early in the next financial year. Any lump sums you receive from your employer such as payments for accrued annual and long service leave, will be taxed in the year they are received. If your tax rate is likely to drop in the 2020 financial year, deferring leaving work may result in a lower rate of tax being payable.
-Tax deductible superannuation contributions– from 1 July 2017, claiming a tax deduction for personal superannuation contributions got easier. Tax deductions are now available to a much wider group of taxpayers. However, contributions are subject to limits and can generally only be made by people under the age of 65, unless they continue to work. Speak to us about this opportunity.
-Maintain good records– there is nothing more frustrating than not being able to find receipts and payment records when tax time arrives. Consider using an app or other web-based solution for recording expenses and maintaining your vehicle log book.
-Net Medical Expenses Offset– this financial year is the last year the offset will be available for costs associated with disability aids, attendant care, and aged care fees.
-If planning to make additional superannuation contributions, remember that 30 June falls on a Sunday this year. Consider making them well in advance at the end of the year to ensure they are received by your super fund on time. Contributions made by electronic funds transfer, e.g. BPAY, are not deemed to have been made until the money appears in your super funds bank account. This could be some days after you initiate the transfer.
-Concessional contributions include contributions made by an employer such as the 9.5% superannuation guarantee, salary sacrifice contributions and personal tax-deductible contributions. The maximum concessional contributions that may be made this financial year is $25,000.
-Non-concessional contributions are contributions made from after-tax income and from other savings. The maximum amount that can be contributed this year is $100,000, or up to $300,000 using the three year bring forward rule. However, if your total superannuation balance at 30 June 2018 was more than $1.6m, you cannot make any non-concessional contributions. If it was between $1.4m and $1.6m, the maximum that can be contributed under the three-year rule has been scaled back.
-Do you hold insurance through your super? If so, legislation passed in February 2019 may result in people with inactive superannuation accounts finding that their insurance cover held inside their super fund is being cancelled. This will apply from 1 July 2019. If your super fund determines your account is inactive, they will write to you and inform you of the pending cancellation of your insurance. If you receive such a letter from your super fund, it is important that you contact us without delay. Your insurance may be retained by either making a contribution to your super fund, or by making an election to retain your insurance.
- If your total income is less than $52,698 you derive at least 10% of your income from employment or self-employment, and you make a personal non-concessional contribution to super, you may be eligible to receive a Government co-contribution of up to $500.
- People who make a contribution to super for their spouse may be eligible to receive a spouse contribution tax offset of up to $540. A spouse contribution tax offset is available where an eligible spouse for whom a contribution is made has income of less than $40,000.
As you can see there are many opportunities to take advantage of as the financial year comes to a close.
For more information or assistance with any of these, Please contact our office.
Have a great and fantastic day.
Until next time,
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Ben Graham-Nellor is an advisor, coach, blogger and speaker who has worked in the financial services industry for over 15 years. He believes that by educating and advising people today, they can improve their tomorrow.
BGN Financial Management Pty Ltd is a Corporate Authorised Representative 468796 of Professional Investment Services Pty Ltd AFSL 234951 ABN 11 074 608 558 www.centrepointalliance.com.au
The information in this communication has been prepared on a general advice basis only. The advice has been prepared without taking account of your specific objectives, financial situation or needs. Accordingly, you should, before acting on the advice, consider the appropriateness of the advice having regard to your objectives, financial situation and needs. In cases where the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (or other relevant information statement) and consider such document before you make any decision about whether or not to acquire the product. For these reasons, it is imperative that you seek advice from your financial adviser before making any investment decisions.