EOFY 2020: Things you must remember to do before June 30

The end of the financial year is less than a week away – and there are some important things you need to do to avoid getting stung.

The new financial year is just around the corner – but there’s more to this time of year than simply lodging your tax return.

There are actually plenty of things to keep in mind before that crucial June 30 date, and they could seriously impact your finances.

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Here’s a round up of everything to keep on top of before that key deadline passes.

HEALTH INSURANCE

More than 380,000 Australian 31 year-olds have until the end of the month to take out private health insurance to avoid the July 1 Lifetime Health Cover Loading deadline.

The Loading kicks in when you turn 31 and adds 2 per cent annually to your eventual premium if you don’t have hospital cover.

For example, someone taking out insurance at 45 will pay 30 per cent more when they get their cover.

According to comparison site Finder, on the average single hospital cover of $1977 per year, it represents an extra $593 more to pay per year – or $5931 over the course of the 10 year loading period.

“If you don’t want to end up paying extra on your future premiums, now is the time to look at whether you should take out hospital cover. While it might be tempting to put it in the ‘too hard’ basket, you could find yourself paying the lazy tax later in life,” Finder’s personal finance expert Kate Browne said.

“Lifetime Health Cover Loading can add as much as 70 per cent to your future premium – that could be thousands of dollars a year.

“If you’re looking at taking out cover for the first time do your research and make sure you’re not signing up for a level of cover you don’t need. Don’t set and forget. Health insurance isn’t a lock in contract – you can switch at any time so regularly compare what’s available and keep an eye out for better deals.”

Meanwhile, Bupa Health Insurance managing director Emily Amos told news.com.au the June 30 deadline was a powerful incentive for some people to buy health insurance in order to avoid penalties through the Medicare Levy Surcharge and Lifetime Health Cover loading.

The Medicare Levy Surcharge is an additional tax placed on people without private health insurance who earn over $90,000 or couples and families earning over $180,000.

Ms Amos said depending on your income over a full financial year, the surcharge can be 1 per cent, 1.25 per cent or 1.5 per cent.

“For higher income earners, taking out private health insurance prior to June 30 can make financial sense because in addition to receiving the benefits of health insurance, you’ll also avoid the Medicare Levy Surcharge and won’t have to pay a minimum of $900 in additional tax,” she said.

“Regardless of the tax benefits on offer, it’s important you don’t just take out private health solely to save on tax. Instead, you should be looking for a policy that will provide you and your family with appropriate cover and peace of mind for your life-stage and circumstances. “After all, your health and wellbeing is far more valuable than any tax break.”

Missing the June 30 deadline could cost you thousands. Picture: iStock

EOFY SALES
If you’re planning on claiming any tax deductions in this year’s tax return, you’ll need to have bought the item by June 30, before the next financial year ticks over.

That goes for all last-minute purchases you hope to claim, such as charitable donations or work-related items.

According to Finder, one in four Aussies plan on shopping EOFY sales this year, down from 76 per cent or three in four people last year.

Of those who say they’ll shop, the median amount they plan to spend is $400, taking the combined national spend to $2 billion.

Gen Z are the most likely to partake in a spot of retail therapy – 39 per cent are planning to fork out during the mid-year sales compared to just 13 per cent of Baby Boomers.

Kate Browne said many consumers were reluctant to spend during the current economic climate.

“Many people are struggling to stay afloat financially, while others would rather save their spare cash than spend it,” she said.

However, Ms Browne said there were plenty of deals to be had for those who still plan to shop during the mid-year sales.

“Retailers are anxious to get their cash registers ringing after a slow quarter,” Ms Browne said.

“We’re already seeing prices slashed by up to 70 per cent at Boohoo and 50 per cent at Sephora. Before making a purchase, compare prices. You may be able to find an item for less elsewhere.

“If you miss out early on – don’t despair. I suspect we’re going to see deals and discounts hang around for a lot longer this year.”

TAX TIPS

If you haven’t already, now is also the time to get all your documents and tax-related expenses together in one place.

It’s also the time to book an appointment with your accountant if you plan on using one.

TOP UP YOUR SUPER

According to Ben Johnston from leading Sydney accounting firm Willett Johnston Partners, topping up your super is “still the best way to save income tax” – but that you’ll have to be organised to reap the rewards.

“It’s the only deduction where you pay money and save tax, and the money is still yours,” Mr Johnston said.

“But it’s really important if people want to pay into their super, it has got to be in their super fund prior to June 30.

“It’s advisable to pay your money into your super in early to mid-June at the latest to ensure the payment is deductible.”