Ten EOFY tax tips for brokers

With the end of the tax year looming, here are ten things you could do before 30 June

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May 04, 2018 Share

With the end of the tax year looming, experts are encouraging finance professionals to think about last minute planning to maximise the refund for the end of the year.

Mark Chapman, director of tax communications at H&R Block, has listed ten things you could be doing before 30 June.

1. Running your own business?

If so, look to utilise the $20,000 instant asset write-off. This allows you to claim an immediate tax deduction for all capital purchases costing less than $20,000, rather than depreciating the cost over several years, as used to happen.

This is great for tech items such as computers, tablets and phones, as well office furniture and equipment.

This allowance is now available to all businesses with an aggregated turnover of less than $10million (previously it was only available to businesses with a turnover of less than $2million) so tens of thousands of additional businesses can take advantage this year.

With many retailers running End of Financial Year specials, any purchases you make now can be deducted in your tax return from 1 July onwards so from a cash flow point of view, you can minimise the time between purchase and tax deduction!

2. Home Office

If you are employed as a broker but work from home, either occasionally or all the time, and run a home office, you are entitled to deductions for costs arising from working at home. The expenses that you can claim include:

Heating, cooling and lighting
Cleaning costs
Decline in value (depreciation) of home office furniture and fittings, office equipment and computers (for items over $300)
Computer consumables, stationery, telephone and internet costs
Items of capital equipment (such as furniture, computers and associated hardware and software) which cost less than $300 can be written off in full immediately.

You’ll need to work out an appropriate split between private use and work use for your home office claim so keep a diary of the time you spend working from home for four weeks sometime between now and 30 June (if you haven’t done it already) and then use that to work out the correct split.

If you run your own business from home, you can also claim a proportion of occupancy costs, such as mortgage interest, rates or rent in addition to the running costs listed above.

3. Car expenses

If you use the log-book method, now is the time to check that your log-book is up to date and that you have all the receipts, invoices and records of journeys which you will need to calculate and substantiate your claim.

4. Mobile Phone

If you used your personal mobile phone for work purposes, you can claim a deduction for the business related use. Make sure you have your phone bills collected together and have kept a log of your business/personal use over a four week period. That percentage can then be applied to the whole year.

5. Prepay some expenses

You can claim a tax deduction this year for expenses which wholly or partly relate to next year. So, if you have some spare cash, consider paying things like professional subscriptions in advance in order to accelerate the deduction.

6. Gather written evidence

Make sure you have written evidence, such as receipts, invoices and bank or credit card statements, for everything you intend to claim. Without substantiation, you can’t claim a deduction. Set aside time between now and 30 June to gather all your paperwork and make sure you have everything you need.

7. Buy a new briefcase

If you use a bag for work, to carry papers or a laptop perhaps, you can claim a tax deduction for the cost. That could include a briefcase, a backpack or a handbag, whichever suits your needs.

8. Take a course

Professional development is tax deductible so fill any knowledge gaps and stay up to date with your skills by attending courses, conferences and seminars. Provided the course is relevant to your current job, a tax deduction should be available for the costs of the course, as well as associated costs such as travel, text books, etc.

9. Offset capital gains against capital losses

If you’ve disposed of shares or any other form of investment and you know you’ve made a capital gain, take a look at your investment portfolio and consider disposing of any assets which you own which you know are sitting at a loss. The resulting capital losses can be offset against the capital gain.

Be careful though if you sell shares sitting at a loss and then buy them back in the new tax year. The ATO takes a hard line against so-called “wash sales”. This refers to the sale of an asset before the year end and the purchase of a substantially identical asset immediately after the year end. The ATO regard the purchase and the sale as effectively the same asset and have issued a Tax Ruling which states that they can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties.

10. Seek expert help

Speak to a tax agent like H&R Block. They can identify exactly what you need to do to get into shape for the 2018 tax season and maximise your deductions.

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