With just over two months until the end of the financial year, chartered accountant GAIL FREEMAN shares some useful tax tips for things to do before June 30.

Here’s a quick list of taxation tips to consider before June 30. 

Tax deductible superannuation – make your contributions as soon as possible. Some of the funds close off in the middle of June. So if you make a contribution and the fund is closed for the year, you don’t get the deduction until the following year. If you are making a personal superannuation contribution and you want a tax deduction you need to fill out a form called “notice of intent to claim a tax deduction”. This form is lodged with your fund. The fund then acknowledges it before you can claim the deduction. The maximum amount you can get a deduction for is $27,500 this year, which includes any employer’s contributions.

Working from home expenses – you need to have a daily diary showing your starting and finishing times each day that you work from home noting any lunch breaks. You can use a diary, time sheets, rosters or even logs showing the time you were logged into the work computer system. If you cannot produce one of these items you do not have a claim. The amount you can claim is $0.67 for each hour that you work at home. This is called the fixed rate method and it covers electricity and gas, phone and internet, stationery and computer consumables. You cannot claim any of these costs additionally if you claim home office. There is another method called actual cost method. You still need a diary for working from home but the rules are different. You cannot claim rates or interest on your mortgage unless you are carrying on a business from home. The actual cost method is more complex and I recommend getting professional advice if you plan to use this method.

Phone and Internet – the ATO explains that if your phone and internet are bundled you need to check what the phone cost would be and what the internet cost would be if you ordered them separately. Then you apply that proportion to the monthly cost which gives you the maximum amount you could claim for each. You then select a representative month and use your phone bill to work out the phone use work percentage. That is usually easy enough to do. You also need to do the same for data, which is usually more difficult to calculate. I generally find that on weekdays, in business hours, the data is probably for work when you’re working from home and nights and weekends, it’s probably not for work. If you don’t have these calculations your claim is limited to $50 annually for each of phone and internet. Remember you cannot claim phone or internet if you are claiming home office.

Tax rates – depending on the amount you earn, your tax rate could be less next financial year than it is this year. So if you are going to make large donations or subscriptions you may be better off to pay them before 30 June to get a larger tax deduction. It is prudent to look at whether there is a benefit in making payments now to get the more advantageous tax rate.

Rental properties – rental properties are always in the ATO’s sights. Does your interest claim include drawdowns that are for private purposes? If so, that loan has to be apportioned because not 100 per cent of the interest is deductible. Have you got any private use of the house at the coast that you rent out? If so you need to apportion deductions for your private use. Do you use part of your home for Airbnb? If so you need to include the income and apportion relevant expenses against that income. There will also be capital gains tax implications when you sell your home.

If you need assistance with your tax contact the expert team at Gail Freeman & Co Pty Ltd on 02 6295 2844, email info@gailfreeman.com.au or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.