With just one sleep to go until the end of the financial year, your options for a last-minute tax deduction are limited, but still possible.
Combining special COVID tax concessions with some tried old methods provides a grab-bag of options to consider.
While the old stalwart of super may have been shoved down our throats for the past few weeks, there’s a couple of tricks you may not be aware of.
PERSONAL BENEFITS
Employee taxpayers, on the other hand, still have a few tricks they can use.
“The instant asset write-off only applies to businesses, but individuals can still buy equipment used to generate tax assessable income, but in this case, the instant write-off is limited to items of up to $300,” Mr Brannen said.
“Above that and you’ll have to depreciate the asset over the tax office-approved lifetime of the asset.”
A $3000 laptop, for example, might have an ATO-approved life expectancy of three years, but based on a daily calculation.
One method of depreciation might see the laptop “written off” over three years, or $1000 for each full year you own it.
Because of the per-day calculation, there’s no real benefit buying it today because you will, at best, only get two days of depreciation this financial year. Buy it on July 1, however, and you get the full 365 days.
A final option, and if available, is to pre-pay tax-deductible costs associated with your occupation like registrations or subscriptions.
Remember, for anything to be claimable this financial year, the transaction must be finalised before midnight on June 30.
SMALL BUSINESSES
Chartered accountant Elliott Brannen, from Tempo Tax and Accounting, said small business operators could make use of special COVID-19 tax concessions, which allows assets up to $150,000 purchased this year to be written off completely.
“It will need to be installed and ready for use,” he said.
“So if you want to buy a new van, unless you can drive it off the lot today, you’re probably too late.
“But you could head off to Bunnings or Officeworks to buy some tools or a new laptop, and claim the full amount.”
People with investments generating assessable income can also claim some forward expenses associated with those assets.
If you have a rental property, for example, you could pre-pay 12 months of insurance, maintenance and other fees in advance and claim those expenses in this year’s tax return.
“If you actively trade shares or other assets online, you should be able to claim a decent portion of the equipment used to generate that income,” Mr Brannen said.
“That might be a new desktop computer, printer or tablet.”