Tax Planning Time

With the end of the 2018 approaching, it means tax planning time is upon us. We would like to draw your attention to some things worth considering as part of your year-end tax planning.

As always, we are here to assist you. If you have questions about any of the strategies mentioned in this email, or you would like to explore new opportunities for tax planning that might be appropriate for your situation, please don’t hesitate to contact us.

Things to consider:

  1. Pre-pay deductible expenses – if you have expenses that are tax-deductible, consider paying them before 30 June in order to bring forward your tax deduction to the current financial year.
    Also, if you run an eligible small business, the instant asset tax right-off that was available in the 2016-17 financial year has been extended to 30 June 2018.
  2. Residential rental properties – travel expenses – for investors that have residential rental properties, the tax deduction for travel expenses to inspect the property was abolished from 1 July 2017.
  3. Defer income – where possible consider deferring income until after the end of the financial year, or where your tax rate is likely to be higher in the 2019 financial year, consider bringing income forward to the 2018 financial year.
  4. Planning to retire, or stop working? – if so, consider deferring your plans to stop working until early in the next financial year. Any lump sums you receive from your employer such as payments for accrued annual and long service leave, will be taxed in the year they are received. If your tax rate is likely to drop in the 2019 financial year, deferring leaving work may result in a lower rate of tax being payable.
  5. Tax-deductible superannuation contributions – from 1 July 2017, claiming a tax deduction for personal superannuation contributions got easier. Tax deductions are now available to a much wider group of taxpayers. However, contributions are subject to limits and can generally only be made by people under the age of 65, unless they continue to work. Speak to us about this opportunity.
  6. Maintain good records – there is nothing more frustrating than not being able to find receipts and payment records when tax time arrives. Consider using an app or other web-based solution for recording expenses and maintaining your vehicle log book.
  7. Net Medical Expenses Offset – even though this offset is gradually being phased out, it is still available for the 2018 financial year for costs associated with disability aids, attendant care, and aged care fees.
  8. Private health insurance – having your own private health insurance may deliver a number of benefits including:
    1. Being eligible to receive the private health insurance rebate;
    2. Avoiding the Medicare levy surcharge; and
    3. Avoiding the lifetime health cover loading if private insurance is not taken out before turning 30.

This is a snapshot of the things taxpayers should be thinking about as they approach the end of the 2018 financial year.

If you have questions about any of the issues raised, or if you would like us to review any aspect of your business or personal tax planning, or simply check that everything is on track, please don’t hesitate to contact the team at Compass Financial Solutions on 07 5492 0350 to arrange an appointment.

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