EOFY tax hacks to get your best return yet

Yes, it’s tax time again. But, what if we told you there are some strategies that could help you get a great return?

“No matter your circumstances, there are plenty of ways to ensure you get a great tax return,” says Helen Baker, Financial planner and founder of consultancy On Your Own Two Feet. Helen shares a few EOFY tax hacks to help you get the most from your return this year.

Tips for individuals

It can be difficult to work out how to maximise your return as an individual, but Helen reveals some of her top hacks to help you get the best result:

“For most taxpayers, interest is only assessable when actually received. If you are lucky enough to have a term deposit, arrange for it to mature after June 30 rather than just before.

“The ATO website provides a list of common expenses for each occupation. When doing your tax return, check out the deductions list for your occupation to find anything you may have spent money on but hadn’t considered. 

“Consider prepaying expenses such as income protection insurance, interest on investment loans, memberships, subscriptions and rental property expenses. You can claim a deduction for these expenses if they are prepaid for a period up to 12 months.

“Ensure you have private hospital cover to avoid paying the Medicare Levy Surcharge. For single people earning over $90,000 (or couples, families and single parents earning over $180,000), the ATO will charge an extra 1 per cent in tax if you don’t have private hospital cover. The surcharge increases to 1.25 per cent if you earn more than $105,000 and 1.5 per cent if you earn over $140,000. It is possible to buy basic hospital cover that costs less than the surcharge, so if you don’t already have health insurance, it could be worth your while.

“Put extra money into your superannuation. You can ask your employer to make extra contributions to your superannuation from your pre-tax salary on your behalf, or you may be able to make a personal contribution if you complete the appropriate paperwork. These contributions cannot exceed the cap of $25,000, (including the employer contribution). Making extra contributions won’t just help build your retirement fund, it could really pay off at tax time too.”

If you’re self-employed

If you’re operating as a sole trader, Helen says that you’ll report your business income on your individual tax return. She adds that there are plenty of deductions you can claim as expenses that help you run your business.

“Deferring any unearned income can be a great way to reduce the amount of tax you’ll pay – at least until next year. Unearned income is money you have received for goods or services which have not yet been delivered. Defer this income until the next year to lower your taxable earnings for this financial year.

“If your cashflow can stand it, hold off sending any outstanding invoices until after June 30. Delaying billing by a month could mean paying tax on the income a whole year later. Be mindful that your customers might be doing the opposite and wanting to pay their invoices by June 30 so they can claim the deduction, so weigh up the decision carefully.

“If you’re seeing a financial planner for the first time, see them twice before June 30. The first visit isn’t tax deductible, but the second one can be if they’re giving you ongoing advice for your investments."

If you’re running a business

For businesses, Helen says this will need to be lodged separately to your individual return and she adds that there are a range of deductions available to you – especially if it’s a home-based business.

“Identify and write off any bad debts, as well as any obsolete trading stock or assets that have outlived their useful economic lives.

“Is the work car due for a service or some new tyres? Why not get it done before June 30? For the sake of paying a few days earlier you accelerate the effect of the tax deduction by a whole year.

“Pay your employees’ superannuation contributions before June 30 to obtain a deduction and to avoid the superannuation guarantee charge.”

Get professional advice

In the end, if you’re really unsure about what you can claim or anything else to do with your tax return, Helen says it is worth seeking out professional advice.

“Doing your tax return doesn’t have to be painful. By knowing how to manage your taxable income and maximise your deductions ahead of tax time, you’re well on your way to getting the best possible return,” she adds.

Helen Baker is a licenced Australian financial advisor and author of two books: One Your Own Two Feet – Steady Steps to Women’s Financial Independence  and On Your Own Two Feet Divorce – Your Survive and Thrive Financial Guide. Helen is among the 1 per cent of financial planners who holds a master’s degree in the field. Find out more at www.onyourowntwofeet.com.au

Want more? We thought you might like this video.

Like this artice? Subscribe to our newsletter to get more articles like this delivered striaght to your inbox.

By registering you agree to our Terms of Use, Privacy Policy and Privacy Notice


Sign Out

Join the Conversation

Please note, LifeStyle cannot respond to all comments posted in our comments feed. If you have a comment or query you would like LifeStyle to respond to, please use our feedback form.