Money mistakes that can ruin your end-of-financial-year party

Don’t ruin new financial year celebrations with a costly money error before June 30. Watch out for these five financial mistakes.

Con the Fruiterer, aka comedian Mark Mitchell, was once a popular TV star.

Con the Fruiterer knew how to spot a lemon.

Three decades ago, back when cancel culture didn’t exist, the fictional TV greengrocer was a national hero who met PM Bob Hawke and shared his Greek wisdom with millions of viewers.

But now, with just a “coupla days” left this financial year, Con’s other popular saying – “doesn’t madda” – shows very little wisdom when it comes to personal finances and June 30.

The next few days very much matter for those wanting to avoid an end-of-financial-year slip-up, or would like to boost their superannuation or tax refund.

These five money mistakes can hurt.

TAX

The rules around claiming tax deductions are strict. If the money is not spent before Thursday July 1, a deduction can’t be claimed until July 2022.

So waiting too long to spend money on work-related items, subscriptions, small business equipment, investment loan interest, income protection insurance or donations means you’ll be waiting another whole year for the tax benefit.

And if you’ve recently enjoyed sharemarket gains or benefited from the cryptocurrency boom, consider holding off selling those winning assets until after July 1 to avoid a capital-gains tax crunch.

SUPERANNUATION

Making extra super contributions delivers handy tax deductions, but it’s a mistake to wait any longer than Monday to send the money to your fund.

That’s because the money must be received by super your fund before July 1, and cash sometimes takes its time transferring.

Check your current super cap before you add more, taking into account what your employer has already paid this financial year – because their compulsory contributions count towards your annual $25,000 cap on tax-deductible (concessional) contributions.

Your account on my.gov.au should show how much of your super cap is available.

PROPERTY

Property investors wanting to claim a tax deduction for interest, insurance, maintenance or other expenses must spend that money by June 30.

They can also consider getting a depreciation report done, which will costs $700 and outlines all the stuff that can be claimed for declining value in an investment property.

Mani property investors fail to claim all the depreciation deductions available to them. The reports themselves are tax-deductible, and you can also claim back two previous years of unclaimed depreciation.

Timing the sale and purchase of both investment and owner-occupier properties can cause land tax traps around June 30, so check if you’re impacted and if you can make any changes to stop potential pain.

SHARES

Don’t sell loss-making shares just to claim a tax deduction and then buy back the same stock in the new financial year.

This is known as a “wash sale”, is illegal, and the ATO will come down hard on you once its scanning systems notice what you’ve done.

SHORT-TERM THINKING

Don’t rush to sell an investment such as shares or crypto just because it delivers you a quick tax benefit. Any investment decision should be about your investment strategy first and tax considerations second.

And remember that marginal tax rates are legislated to have huge changes in mid-2024, so selling a big asset – such as an investment property – before then may cause tens of thousands of dollars of unnecessary capital gains tax.