It's not ideal to think about tax planning with less than 2 weeks until the End of Financial Year (30 June 2012), but my motto is "better late then never".
I've briefly summarised my top 10 last minute tax planning tips for the everyday worker. If you have any questions about any area or its application to your situation please feel free to contact me.
1. Donations - consider making any donations to registered charities before 30 June 2012.
2. Prepay private health insurance - from 1 July 2012, the 30% rebate will only apply for singles earning up to $84,000 and couples earning up to $168,000. A reduced rebate will apply for those earning between $84,000-$130,000 for singles, and between $168,000-$260,000 for couples. Those above these rates, don't get any rebate. If you fit into the category of no rebate or reduced rebate, you should consider prepaying your private health insurance before 1 July 2012 to continue the full 30% rebate (you can prepay up to 30 months in advance).
3. Quantity surveyor's report for investment property - You could be missing out on thousands of dollars of investment deductions (such as depreciation on plant, fixtures and buildings) if you haven't obtained one of these for your new or existing investment property. Order one before 30 June 2012 and you can also claim the cost of the report.
4. Work clothes and uniforms - if your corporate uniform needs replacing, your work overalls have seen a better day or your steel-cap boots are falling apart, consider purchasing these deductible expenses before 30 June 2012.
5. Bring forward medical expenses - if you've spent close to or more than $2,060 on out of pocket medical expenses, than consider purchasing any more prescriptions/pharmaceuticals/medical services before 30 June 2012. This will allow you to maximise the tax offset of 20% in excess of $2,060. The medical expenses offset will be means tested from 1 July 2012 and those with income above $84,000 (single) and $168,000 (couple) will only get 10% on out-of-pocket medical expenses in excess of $5,000.
6. Appoint a tax agent - Those that don't use a tax agent will have until the 31 October 2012 to lodge their 2012 tax return. Those who appoint a tax agent before the 31 October 2012 get an extension until March 2013 to lodge their 2012 tax return and don't incur any late fees.
7. Government Super Co-Contribution - if your income is less than $31,920 for the Financial Year, you'll receive a $1 for $1 benefit up to $1000, for any after-tax contribution you make into your super before the 30 June 2012. This means if you contribute $1,000 to your superannuation, the government will also contribute $1,000 to your superannuation. If your income is between $31,921 and $61,920 the government will still contribute a proportion of your after-tax super contribution. Below is a link to work out how much the government would contribute or alternatively, send me a private message if you are interested in maximising the benefit of a super co-contribution. Unfortunately, from 1 July 2012, the co-contribution is decreasing to a maximum $500 contribution for those only on incomes less than $46,920.
http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=superc_calc.xr4&go=ok
8. Tax Offset for contributing to spouse's superannuation - if your spouse's income is less than $10,800, then you could qualify for a maximum tax offset of $540 if you make an after-tax contribution of up to $3,000 before the 30 June 2012. For those whose spouse's income is up to $13,800, you will be still be eligible for an off-set.
9. Keep a four week diary of home-office use - if you are having to bring home work from the office regularly, keep a diary for four weeks detailing the hours spent working in you home-office and you will be entitled to claim 34 cents for every hour. Whilst, it's not the hugest tax deduction, every cent counts and it can make working outside of work hours that slightly more tolerating!
10. Purchase any work-related expenses on your debit or credit card - I recommend this to all my clients, as in the unfortunate event that you lose a receipt come tax time, it's still possible to substantiate the work expense with the credit card or bank statement.
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