Tax time strategies to start today
TAX time is just over a month away, and whether you're a worker or an investor, it gets real now.
Leaving tax planning to the last minute might cost you plenty, because many of the most lucrative tax deductions can't be organised easily in the last week of June.
HLB Mann Judd tax partner Peter Bembrick said now was the time to put in place tax strategies, before it was too late to make a difference.
"As a general rule, the approach should be to pay any tax-deductible expenses now, so the deductions can be made this year to reduce taxable income, and put off any non-deductible costs to the next tax year where possible," he said.
For workers this means buying things such as tools, uniforms and office supplies in the next few weeks. For investors it can mean completing rental property maintenance before June 30, paying annual landlords insurance premiums, or prepaying interest on investment loans.
NDA Law managing director Andrea Michaels said it was a good idea to bring forward purchases that might qualify for work-related tax deductions.
"If you're about to buy a mobile phone or laptop you would want to do that in June," she said.
Changes to superannuation rules last year have given all workers a chance to make extra personal super contributions in the coming weeks and claim a deduction for them.
"It definitely is easier to contribute now, but the caps are lower so you have to be careful you don't put too much in," Ms Michaels said.
Since July 2017 the maximum limit for tax-deductible super contributions - known as a concessional contributions - is $25,000 per person, including salary sacrifice and employers' compulsory 9.5 per cent contributions.
HLB Mann Judd's Mr Bembrick said people should aim to make tax-deductible payments such as donations, subscriptions and income protection insurance premiums well before June 30.
Donations to charities and super fund contributions were recorded as the date they were received, not the date sent, he said.
Capital gains tax planning should also start now, with investors able to sell loss-making shares or other poor investments in June to offset capital gains made on investments sold for a profit. Looming capital gains should be delayed until July where possible.