Start on strategies for tax deduction

WITH tax time little more than a month away leaving planning to the last minute might cost you plenty, because many lucrative deductions can’t be organised easily in the last week of June.

“As a general rule, the approach should be to pay any tax-deductible expenses now, so the deductions can be made this year to reduce taxable income, and put off any nondeductible costs to the next tax year where possible,” HLB Mann Judd tax partner Peter Bembrick said. For workers this means buying things such as tools, uniforms and office supplies in the next few weeks. For investors it can mean completing rental property maintenance before June 30, paying annual landlords insurance premiums, or prepaying interest on investment loans. NDA Law managing director Andrea Michaels said it was a good idea to bring forward purchases that qualify for workrelated tax deductions.

Changes to superannuation rules last year have given all workers a chance to make extra personal super contributions in the coming weeks and claim a deduction for them.

“It definitely is easier to contribute now, but the caps are lower so you have to be careful you don’t put too much in,” Ms Michaels said.

Since July 2017 the maximum limit for tax-deductible super contributions – known as concessional contributions – is $25,000 per person, including salary sacrifice and employers’ compulsory 9.5 per cent.

Mr Bembrick said people should aim to make taxdeductible payments such as donations, subscriptions as well as income protection insurance premiums well before June 30.

Donations to charities and super fund contributions were recorded as the date they were received, not the date sent.