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Top Effective Strategies For Your EOFY Tax Plan!!!

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  • Top Effective Strategies For Your EOFY Tax Plan!!!

Another financial year is about to end, but don’t worry; there are still some lucrative strategies that you can apply to maximize your tax refund. The goal is to ensure that you don’t have to pay more than you are expected to in the 2020-21 year and maximize the refunds you might be qualified to receive.

Due to this ongoing COVID-19 situation, most businesses and organizations have to pay attention to this matter. You should know that it is better to adopt the best strategies as soon as possible during the early stages of the financial year, and it is worth considering proper tax planning rather than focusing on the better and bigger deductions.

The best EOFY tax tips include analysing your current state of affairs and planning your associated deductions and incomes from income earned every year. One should know that not every tip will align with your unique circumstances, but these will provide you with the possibility to get your financial records back on the right track.

  • Temporary Full Expensing

Temporary full expensing is an intuitive scheme introduced by the government, effective for depreciating assets obtained between October 06, 2020, and June 30, 2022. You deduct the cost of acquiring the depreciating assets from the income year after the asset was first held or ready to use before June 30, 2022.

While the improvement cost incurred on depreciating assets is deductible during the financial year, improvements are made, not after June 30, 2022. But the write-off rules for instant assets, there is no fixed limit that can be deductible for any respective asset. This can lead to some effective tax planning in the 2020-21 tax year when you acquire or improve assets.

  • Incorporate CGT Rules To Maximize Your Benefits

If your investments have provided you any capital gain during this financial year and think about any loss, you have made by selling your investment before June 30. You can offset your investment loss from the successful one, potentially reducing the taxable income.

You should know that a capital gain occurs right after you sign the contract for CGT, not when you settle the share transaction or purchased property. This strategy can give you a handy tax planning advantage, but you should check whether it will suit your situation; otherwise, you are risking the attention of ATO.

  • Property Investment

You can claim expenses fully or partly incurred on your rental property before June 30 in the ongoing financial year. Whether you need some tree lopping or gutter cleaning in your investment property, see if you avail of the maintenance cost in the 2020-21 year. The expenses stemming from the rental property is still deductible as long as it is available for rent regardless of this Covid-19 situation.

  • Bring Deductible Payments And Defer Income

It would help if you tried to bring other deductible expenses as discussed above in the 2020-21 financial year. If you are able to determine that the next income year will be less proficient, you can bring any other deductible expenses into the ongoing year. However, you can delay any deductible expenses to next year in the reverse situation, where financial deductions benefit you the most. However, this strategy might not be that much effective due to the current Covid-19 environment.

Final Thoughts

Nobody knows your circumstances better than yourself, meaning you can determine whether these tips can align with your state of affairs or not. Every taxpayer has to file their return by October 31, especially if the refund can make your circumstances better.

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