Seven things to do before June 30 to maximise your money gains
June 30 is less than a week away, so try to tick off these key tax and other issues to stay ahead of the financial pack.
The final week of the financial year offers big opportunities for Australians to save some serious dollars through tax deductions, smart spending, superannuation injections and managing household bills wisely.
Financial experts say there is still time to make money-saving moves but, for many strategies, at midnight on Friday the clock will stop.
Here’s a seven-point checklist for individuals to ensure all the big bases are covered in the lead up to June 30.
1. TAX DEDUCTIONS FOR WORK
Work-related deductions offer some of the best end-of-financial year tax benefits, but it’s important to know what is allowed for your occupation.
The latest Australian Taxation Office figures show more than 9.6 million people each claimed an average $2381 of work-related expenses for the 2020-21 financial year – about $23 billion in total.
The ATO has about 40 occupation and industry specific guides to help workers understand what they can and cannot claim, and Women with Cents founder Natasha Janssens said these could be helpful.
“Make sure you are claiming every eligible deduction including stationery, tech, your work bag, even memory cards or speakers, depending on your occupation,” she said.
“Look ahead at what expenses or upgrades you want to make in the months ahead, and make them before June 30.” This ensures the tax deduction can be claimed from July rather than having to wait another year.
Officeworks general manager of merchandise Jim Berndelis said its research found more than one-third of Australians had forgotten to claim their work stationery such as pens, notebooks, paper and printer ink.
“Take a moment to consider what purchases you’ve made in the past financial year you could be deducting,” he said.
“You’ll find a lot of sales on offer at this time of year and by shopping smarter you can get even better value on the EOFY items you need.”
2. WATCH YOUR WORK-
FROM-HOME HOURS
The ATO has dramatically changed the rules about working from home deductions in the past year, and it is important to understand them before June 30.
First, from July 2022 it stopped the 80c per hour shortcut method that was introduced during the pandemic for working from home deductions.
Then from March this year it revamped the fixed rate deduction method, lifting the rate from 52c to 67c per hour worked from home, but including items such as internet, phone and stationery. It also toughened up record-keeping requirements.
KPMG tax partner Ursula Lepporoli said estimates of hours worked or a four-week representative diary would not be accepted from March 1 this year.
“At least one record must also be kept for each of the additional running expenses incurred that are included in the fixed rate – for example, one quarterly bill for electricity if you incurred additional electricity expenses as a result of working from home,” she said.
“The alternative to the above is to claim a deduction for work-from-home expenses using the self-explanatory actual cost method, which is more onerous in calculating and record-keeping, but may provide a more favourable outcome by way of a higher tax deduction.”
Chartered Accountants Australia and New Zealand tax advocate Susan Franks said be careful of how you record your time.
“An estimate can be used from 1 July 2022 to 28 February 2023, but from 1 March 2023 exact details of when you worked from home are needed,” she said. “So ensure you have time sheets or a diary to support your claim.”
3. TAX DEDUCTIONS
FOR INVESTMENTS
There are two key tax areas investors should consider this week – tax-deductible expenses and the timing of asset sales.
Property investors who required maintenance or quick repairs should try to get them done this week so they can claim the deduction from July. Investors can also prepay interest and landlord insurance to bring forward deductions.
When it comes to timing, this is generally not the week to sell something for a large capital gain, if it is possible to delay it for a week and into the 2023-24 tax year instead.
KPMG’s Ms Lepporoli said the ATO had warned taxpayers that it would notice when assets were sold for a capital gain or loss.
“CGT may apply to a variety of assets including shares, cryptocurrency, management investments and properties,” she said.
You cannot sell an underperforming share this week to lock in a capital loss and then buy it back the following week – this is known as a wash sale and is not allowed.
The ATO said its sophisticated data analytics could identify wash sales through access to data from share registries and crypto asset exchanges.
“When the ATO identifies this behaviour, the capital loss is rejected, resulting in an even bigger loss to the taxpayer,” it warned.
4. SUPERANNUATION STRATEGIES
Making extra contributions into super can deliver people tax deductions, or other benefits such as government co-contributions and spouse rebates.
However, first check if your fund allows last-minute contributions, as some have mid-June cut-off dates. If you have your own self-managed super fund, you can deposit money into your fund right up until June 30.
“Extra super contributions could save you on taxes but make sure you get in before your super fund’s cut-off deadlines,” Ms Janssens said.
UniSuper’s advice technical and strategy lead, Brooke Logan, said people earning less than $57,016 this financial year could consider making a $1000 after-tax contribution to their super to qualify for a government co-contribution of up to $500.
“To potentially qualify for a $540 tax offset, if your spouse earns less than $40,000 a year consider making an after-tax contribution of up to $3000 to their super fund,” she said.
Personal super contributions could be tax-deductible and people with less than $500,000 in super might be able to make extra contributions using their unused contribution caps from the previous five years, Ms Logan said.
“Not everyone is aware of these little tweaks you can make to your financial plan which will ultimately benefit you and your family in retirement,” she said.
5. FOCUS ON HEALTH INSURANCE
Most major health insurers delayed their 2023 premium rises until June 1 or later, so now is a good time to check what you are paying and whether better value is elsewhere.
iSelect spokeswoman Sophie Ryan said the end of a financial year was a great time to think about private hospital cover because of government incentives and penalties.
“For higher income earners, taking out hospital cover before June 30 means you could avoid paying the Medicare Levy Surcharge next financial year,” she said.
“There may be very little cost difference between paying the additional tax or taking out a level of hospital cover which may provide significant benefit should you experience a health issue in the future.”
6. OTHER BILLS
Ms Ryan said many people were struggling with cost-of-living pressures and now was a great time to take stock of all household bills.
Electricity prices are rising 20-30 per cent on July 1, phone contract costs are also climbing, and mortgage interest rates have been increasing since May 2022, so it is worth checking comparison websites to work out whether you are paying too much.
A quick analysis of your latest insurance renewals for home, contents, cars and other assets may deliver a nasty surprise, as some premiums have surged. Calling a few competitors for some new-customer quotes can potentially save hundreds of dollars.
7. DONATIONS
Feeling generous? The final week of June is a big one for donations, and charities often run campaigns at this time to try to cash in. People who make a legitimate donation above $2 before midnight on June 30 can claim a tax deduction for it from July 1.
“If you want to top up the karma bank, donate to a registered charity,” Ms Franks said. “But remember, the charity must be registered or the deduction won’t apply. Go Fund Me pages and amounts added to receipts at a checkout don’t qualify – so keep that in mind when making donations.”
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