How many of us see these fantastic flashing advertisements on the television, pushing products to be brought before the end of the financial year in order to receive a “Tax Bonus” or “Tax Saving”?
Products from health insurance to motor vehicles are aggressively marketed or “reduced for EOFY” in lieu of seducing a deal out of the audience.
But how much benefit can you really get out of a purchase just before June 30? Let’s have a look at a few items and a few entities looking to boost their tax refund potential.
Motor Vehicles –
Mum and Dad’s running a small business can reap rewards if renewing the old “work horse” for travel or delivery within the business. If their turnover is less than 2 million, and they purchase a new vehicle under $20,000, it can be claimed outright in the business tax return. It does not have to be a brand new vehicle, just new to the business. Buying in the business name and under the ABN will ensure the maximum claim available. Employees paid salary and wage looking to update their vehicle, unfortunately will not benefit from this incentive. However, salary sacrifice and depreciation rules still apply and, in some cases, provide a substantial deduction or saving provided you keep the appropriate paperwork.
Stationary –
As this is not a depreciating asset, the only claim available is to what receipts you have kept. Accountants are now seeing more of a shift towards employees footing the bill for these items, but provide a minimal tax saving. Where possible have your employer pay for stationary items you require, especially if working from home.
Health Insurance –
These policies are commonly misconceived to “avoid tax “to all entities. A policy taken out at June 30 may beat the deadline for over 30 yr olds paying a higher premium, but it really will not affect your tax return, as the number of days you have held the policy for is the real deciding factor. The type of cover and amount you have paid in premiums will also vary any deduction applicable at tax time. And if your income does not meet the rebate requirements, alongside the premiums not being paid in full, these are the multiple hurdles and brick walls that consumers face.
Technology –
For individuals, if the item costs less than $300, a complete deduction can be claimed if the asset is used solely for work. Items over $300 will be depreciated, meaning you will receive part of the items cost as a deduction, in the claiming year.
Small businesses can claim non- depreciating items up to $1000 outright normally, or if the item is large enough to have a “life”, for example a desktop computer, large printers etc, the $20,000 instant asset write off applies.
It really does pay to be informed whilst shopping about in the End of Financial Sales, as you could really catch a bargain if applied correctly come tax time.
For any queries, or if you are looking to take advantage of the offers, please contact your Accountant before you purchase, as they will be able to advise you based on your current position.
If you require information, you can call us on 07 5444 1022 or email info@gpla.com.au.