The end of the financial year (EOFY) is a critical period for individuals and businesses alike. Proper planning and organisation can lead to significant tax savings and ensure compliance with tax laws. 

 

Here are ten essential EOFY tax tips and the importance of consulting an Accountant or Financial Adviser for professional advice.

 

Maximise Deductions
Ensure you claim all eligible deductions. Common deductions include work-related expenses, charitable donations, and interest on investment loans. Keeping detailed records and receipts is crucial.
Prepay Expenses
Consider prepaying expenses such as insurance premiums, subscription services, or investment-related costs. By doing so, you can bring forward deductions into the current financial year, potentially lowering your taxable income.
Review Investment Strategies
Review your investment portfolio for opportunities to minimise tax. Selling underperforming investments to offset capital gains with capital losses can reduce your taxable income. However, always consider the long-term impact on your investment strategy.
Contribute to Superannuation
Making additional contributions to your superannuation can be a tax-effective way to save for retirement. Contributions up to a certain limit may be tax-deductible, reducing your taxable income and boosting your retirement savings.
Manage Depreciation
For business owners, managing asset depreciation is essential. Ensure all eligible assets are depreciated appropriately. Small businesses can immediately write off assets under a specific threshold, providing immediate tax relief.
Write Off Bad Debts
If you have outstanding debts that are unlikely to be recovered, consider writing them off before the EOFY. Writing off bad debts can provide a tax deduction, improving your financial position.
Stocktake and Asset Valuation
Conduct a thorough stocktake and asset valuation. Write off any obsolete or damaged stock, and reassess the value of your assets. Accurate stock and asset valuations can impact your taxable income.
Defer Income
If possible, defer income to the next financial year. Delaying invoicing or receipt of income can reduce your taxable income for the current year. However, ensure this aligns with your overall financial strategy.
Utilise Government Incentives
Take advantage of any government incentives or grants. Programs such as the Research and Development (R&D) Tax Incentive or the Instant Asset Write-Off can provide substantial tax benefits.
Keep Accurate Records
Maintaining accurate and up-to-date financial records is crucial. Good record-keeping practices simplify tax preparation, ensure compliance, and make it easier to identify potential tax savings.

 

The Importance of Using an Accountant of Financial Advisor

Navigating the complexities of tax laws and regulations can be challenging. An accountant provides professional expertise and tailored advice to optimise your tax position. Here are several reasons why consulting a professional is beneficial:

Expert Knowledge: Accountants stay updated on the latest tax laws and regulations, ensuring you comply with current requirements and take advantage of any changes.
Strategic Planning: Accountants and Financial Advisors can help develop a tax strategy tailored to your financial situation, maximising deductions and minimising liabilities.
Time Savings: Handling tax matters can be time-consuming. An accountant can efficiently manage tax preparation, allowing you to focus on other important aspects of your life or business.
Accuracy and Compliance: Mistakes in tax filings can lead to penalties and audits. An accountant ensures your tax returns are accurate and compliant, reducing the risk of errors.
Stress Reduction: Tax season can be stressful. Having a professional handle your taxes provides peace of mind and reduces stress, knowing your finances are in good hands.

 

In conclusion, effective EOFY tax planning involves maximising deductions, managing investments, and keeping accurate records. Consulting an accountant is essential for professional advice, ensuring compliance, and optimising your tax position. By following these tips and seeking expert guidance, you can achieve significant tax savings and financial peace of mind.

 

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

This information does not take into account the objectives, financial situation or needs of any person. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs.

(Feedsy Exclusive)