By John Collett
The financial year comes to an end in a matter of days, and if you’re the sort of person to leave your tax affairs to the last minute, don’t worry. There are still plenty of ways to reduce your tax and boost your super that are easy to do before July 1.
Luggage you use for work, such as a handbag or briefcase, can be claimed as a tax deduction.Credit: Bloomberg
Working from home
You are entitled to certain deductions for costs incurred in earning income and for costs arising from working from home.
Items of capital equipment, such as furniture, computers and associated hardware and software, which cost less than $300 and are used for work-related purposes can be written off in full immediately, says Mark Chapman, director of tax communications at H&R Block. Items costing more than $300 are claimed over the effective life of the item.
With many retailers running end of financial year sales, purchases you make up to June 30 could be claimed as a deduction in this year’s tax return, instead of making the claim in 12 months’ time, Chapman says.
Buy a new handbag
There is still time before July 1 to buy a handbag, briefcase, satchel or backpack which, if they are used for work to carry your laptop and work papers, should be claimable as an immediate work expense deduction if it costs less than $300.
The Tax Office says items you carry and use for work may include laptops, tablets, work papers, protective equipment or diaries. Items such as gym gear, food, or a personal phone, tablet or laptop are not items you need to carry and use for work. These are private or domestic items.
When you use the bag or case for both private and work purposes, you need to apportion your deduction, Chapman says.
Super co-contribution
Superannuation is another area where last-minute contributions can help to build retirement savings.
If your total income is less than $43,445 before tax in the 2023-24 financial year, you can make an after-tax contribution to your super fund of up to $1000, with the government matching every dollar up to $1000 with 50¢.
The co-contribution reduces as your income rises to $58,445, when the government co-contribution cuts out altogether.
“If your child or grandchild is starting out in their career or working part-time, they may be earning equal to or under the income threshold,” says Derek Gascoigne, a financial adviser with UniSuper.
“This means they could be eligible for a government co-contribution of up to $500; this is essentially free money.”
Concessional super limit
The largest tax deduction most people still have available to them is to put more into their super to claim up to the maximum concessional limit of $27,500.
“It is worthwhile for those earning $45,000 and above, who can afford it, as they receive a personal tax deduction of 34.5 per cent (including Medicare) and the super fund pays 15 tax on earnings, which works out at a net tax benefit is 19.5 per cent,” says Jonathan Philpot, partner wealth management at HLB Mann Judd.
For those in the two higher tax brackets, the tax benefits are even more significant, he says. Those intending to make a concessional contribution to their super fund need to check that that will not exceed the $27,500 limit during 2023-24, which includes voluntary concessional contributions as well as compulsory super.
Those making contributions to their super fund would want to act quickly to allow time for the money to clear with their super fund before June 30, which falls on Sunday.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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