Keep more money in your own pocket with these end of financial year money-saving tips.
Every 12 months when the end of the financial year (EOFY) comes around, we’re bombarded with ads and marketing for “unmissable” EOFY deals. From cheap cars to home entertainment systems, there are plenty of bargains to be found at this time of year.
But there are plenty of ways that you actually can save money before the curtain comes down on yet another financial year. With a little bit of planning and forethought, and by making smart decisions, you could give your tax return a huge boost.
Ask an accountant
Does the world of income tax, expenses and deductions make your head spin or your eyes glaze over? Working out how to make the most of your money come EOFY is a tricky and confusing business, so never hesitate to ask a trusted accountant for help and advice. After all, accounting fees are tax deductible.
Buy a car
For the majority of new car buyers, EOFY is the perfect time to shop around for a new car. This is the time when manufacturers slash prices and look to end the financial year on a high, with all the major brands vying for their share of the consumer dollar. EOFY purchases can also benefit business customers looking to improve their tax return, so it’s worth shopping around to see what deals are on offer.
But be aware of any deals that sound too good to be true. For example, 0% finance deals might sound like a win-win, but dealers have other ways of making up the money they otherwise would have received in interest, including charging more for the car than is necessary.
Buy other big-ticket items
Car dealers aren’t the only ones offering big savings at the end of the financial year. Across the board, retailers offer large discounts in an effort to clear out old stock and balance the books for tax time. So if there are any big-ticket items you need, now is a good time to shop around for a bargain.
From furniture and whitegoods to electronics and even holiday packages, there are plenty of great deals to be had in EOFY sales. Compare your options to see how much money you can save.
Contribute to super
Putting more money into superannuation is a great way to minimise the amount of tax you pay. By salary sacrificing some of your pre-tax income, you can not only boost your super but also lower your tax bill. However, be aware that annual contribution limits apply – check with the ATO for details.
In addition, if you earn less than $50,454 per year (before tax), making an extra contribution to your super could entitle you to the Federal Government co-contribution. The maximum co-contribution available is 50 cents on every dollar up to $500 a year if you earn less than $35,454 before tax, so it’s well worth the effort if you’re not a high income earner. After all, why would you want to pass up free money?
As well as this, self-employed Australians can claim their after-tax super contributions as tax deductions, allowing you to reduce your next tax bill and build towards a secure financial future.
Donate to charity
Have you made any tax-deductible charity donations this financial year? If not, there’s no time like the present. Donating to charity has positive repercussions at tax time, with the donation used to either offset your debt or help your refund grow. It’s a nice little reward for doing something good.
Search for other deductions
June is the perfect time of year to work out whether there are any other expenses you can claim as tax deductions and how you can manage those purchases in the most tax-effective way.
For example, if you have income protection insurance, prepaying your insurance premium for the coming 12 months will allow you to claim a deduction for the current financial year rather than the next one.
Check the ATO website or ask your accountant for information on any other legitimate deductions for someone in your occupation, as every little bit goes a long way. And most importantly, remember to keep your receipts!
Watch out for scams
In amongst all the usual EOFY media content we’re immersed in during June, there’s also usually media coverage of the latest “ATO scam” targeting unwary consumers. The ATO receives tens of thousands of complaints about scams every year, most of them involving fake emails that look like they’re from the ATO but are actually sent by scammers who are after your details.
Phone scams are also quite common, such as calls from bogus ATO investigators claiming that you have committed tax fraud. This is usually followed by the threat of legal action and a demand for you to supply your banking details.
The ATO will typically send a letter before contacting you, but if it does call you will be given a number you can phone to confirm that you are actually dealing with the tax office. If you ever receive any communication purporting to be from the ATO and you’re unsure about its authenticity, contact the ATO on 13 28 65.
Prepare for the next financial year
EOFY is also a great time to review your finances and make plans for the year ahead. Do you have an effective tax strategy in place for yourself and your business? Could you be getting more from your tax return?
By taking some time at the end of the financial year to plan for the 12 months ahead, you can not only enjoy savings at tax time this year but also in the future. Work out where you can save money now and you could reap the benefits for years to come.