Tax deduction moves to make in June for a richer end to 2022-23

The clock is ticking ahead of tax time, and experts urge people to focus on these key areas to dial up a deduction and secure a healthy refund.

Tax time is only a month away, and the next 30 days offer big opportunities for workers, investors and superannuation fund members to dial up their deductions and secure a healthy refund.

People earning up to $126,000 a year are already facing a smaller refund this tax time, after the end of the Low and Middle Income Tax Offset last year. It had added between $625 and $1500 to millions of Australians’ tax refunds for 2021-22.

Sharon Shen, a senior accountant at dmca advisory, says tax planning arrangements cannot be backdated, so June is the final month to sort out your tax planning strategies.

EMPLOYMENT

Bringing forward costs related to your work is a popular move, and there are many deductions available across areas ranging from uniforms and education to cars and work tools and equipment.

“If you have a plan to spend money on anything for work in the near future, for example a

subscription or professional membership, bring them forward to June to increase the deductions,” Shen says.

“You can claim the immediate deduction for the assets that cost $300 or less in the year that expenses incurred.” The value of larger assets must be written down over time.

The Australian Taxation Office produces guides for 40 different occupations and industries, helping people spot potential deductions for their job.

Sharon Shen from dmca advisory says tax strategies cannot be backdated. Picture: Supplied

SUPERANNUATION

Shen says making a personal super contribution to your fund may deliver a tax deduction that boosts your refund.

“Please be aware that there are certain caps applied,” she says.

“If you make a contribution of $3000 or more into the superannuation account on behalf

of your spouse whose assessable income was less than $37,000, you are entitled to a maximum tax offset of $540.”

CreationWealth senior financial adviser Andrew Zbik says additional contributions to super are a good general strategy to employ before June 30.

Some people also can “make additional catch-up concessional contributions to super”, he says.

INVESTMENT

Zbik says people may be able to prepay accounting or financial advice fees and claim a deduction.

“Ask your bank if you can prepay any interest on other investment loans for the 2023-24 financial year before June 30,” he says. This brings forward the deduction by 12 months, but only do this if it makes financial sense for your tax affairs.

Property management group :Different’s head of customer advocacy, Danielle Bunton, says real estate investors should speak with their tax accountant to determine what claims they can make.

“One area that property investors often overlook is the depreciation schedule – a report that outlines tax deductions available across the property’s assets such as removable items like plant and equipment, carpets and appliances,” she says.

Planned maintenance or repairs to an investment property can be done in June to bring forward the tax deduction by a year.

“Investors should make sure they have all associated receipts and invoices for any repairs,” Bunton says.

DONATIONS

Shen says people can also consider making tax-deductible donations to charities of their choice.

“You can claim a deduction of donation made to deductible gift recipients as long as the amount is more than $2,” she says.

“However any gift or donation that provides you with a personal benefit or something in return, such as raffle tickets, is not tax deductible.”

Lucy Byrnes ensures tax-deductible spending is done before June 30. Picture: Naomi Jellicoe

EDUCATION DEDUCTIONS

Among those taking more notice of tax time this year is Lucy Byrnes, 23, a digital media executive at marketing agency kwpx.

“Since I started working full time, I’m now paying more attention to what I can and can’t claim,” she says.

“I am fortunate enough that my employer offers the flexibility to study a further degree-related

to the work I am now doing. This incurs expenses that need to be considered around tax

time such additional study-related costs like some course fees, student amenity fees, subscriptions

and books.”

Byrnes is also considering other courses in the digital media space and is joining professional industry bodies.

“I have already prepaid the associated costs to claim before the end of June as a work expense,” she says.

Extra tax-deductible superannuation contributions round out her busy tax planning period.

“I have found the ATO app and website useful to assist with planning and identifying my expenses that are work related,” Byrnes says.