Forman Financial Services

2015-2016 EOFY Tax Tip

Timing deductions for best tax outcome

As with the end of any financial year, it is important for one to maximise any tax deductions one may be entitled to, but also ensure where possible that the deduction is able to be claimed in the financial year where it has most impact.  This may mean incurring deductible expenses by 30th June to reduce taxable income in this financial year, or if one’s marginal tax rate is expected to be higher next financial year, delaying deductible expenses until after 30th June.

Some deductible expenses one may wish to bring forward include:

  • repairs and other eligible ongoing expenses relating to an investment property
  • ongoing expenses incurred in running a business
  • eligible self-education expanse
  • home office expenses

One is allowed to prepay up to 12 months’ worth of these expenses and claim a tax deduction in the year of payment.

Eg, if one prepays  2016-2017 income protection insurance premiums in June 2016 and claim a full tax deduction in the 2015-2016 income tax return.

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