Tax Planning 2019 - Individuals/Sole Traders
It's time to get organised and plan the final stretch of 2019. We always say have all your tax minimisation strategies in place by the end of May for June 30. Some tax minimisation strategies are not available in June, i.e interest prepayments on investment interest needs finalising in May for some banks.
Note the following key areas to consider as part of your June 30 tax planning Arsenal:
Individuals (Employees/Sole Traders)
Investment Property
Selling an investment property or shares with a capital gain? Ensure you have held the investment for more than 12 months to receive the 50% CGT discount.
Have an investment property but no depreciation schedule! Call to discuss your options and if this is relevant to your circumstances.
If you have an investment property you can prepay interest for the next 12 months and associated running costs of the property, and receive a full tax deduction this year. Consider your circumstances and if this is a useful strategy.
Motor Vehicle
Use your car for work and travel in excess of 5000 kms per annum? Start a log book prior to 30 June to be able to use this method.
If you use your spouse’s motor vehicle (registered in their name) for work related travel, make sure you instigate a declaration of joint ownership before 30 June. Ask us how.
Work Related
If your employer has made it mandatory for you to work from home and maintain a dedicated home office, you may be able to claim a portion of your home rent. Contact us to discuss the necessary requirements.
If you work overtime as part of your employment, you may be able to access tax deductions for meals purchased, without receipts, if provided for on your payslip as an allowance or employment contract and under $30.60 per meal.
Income or Expense
Trades people – Making big materials payments in July? Maybe it’s worth bringing these forward and deferring customer payments received. Spend time reviewing your business forecasts and timing of purchases. We have seen benefits in excess of $50k of tax savings from utilising such an approach. Need help forecasting ? Let us help you.
With regard to your investment performance and structure, is re-balancing required and realising capital gains prior to June 30 a sensible strategy? Discuss with your financial planner.
Don't have income protection but have a family, home loans and personal investment loans ? You may want to get insured prior to June 30 and claim the premiums this tax year.
Medicare
Consider your circumstances around the Medicare levy surcharge and having or not having health insurance. See our overview of the benefits in our website blog area.
Superannuation
Utilising salary sacrificing to Superannuation as a tax minimisation strategy? The Concessional super contributions cap of $25k applies to payments received by the fund in the 2019 tax year. Make sure you don’t exceed the cap and check your fund statements and adjust contributions before 30 June if required. If unsure what amounts you can contribute, you will need to ask you fund or review your latest statement.
Final Notes
Although tax laws are complex and constantly changing, there are always opportunities to legitimately minimise your tax liability. Understand you substantiation requirements and be well prepared with supporting documentation. To discuss your individual circumstances or concerns, and to have a tailored plan designed to meet your personal circumstances, book a meeting before June 2019.
