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Year-end tax planning

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Tax time is almost upon us and now is the time to ensure that you have taken all possible steps to optimise your tax position for the 2011 financial year.

Tax planning at this time of year falls into four broad categories: maximising deductions, bringing forward expenditure, deferring receipts and managing capital gains. Here are some strategies to consider:



  • If you are considering buying some equipment that is to be used in relation to your work and it will cost less than $300, buy it before 30 June to get a tax deduction this year.
  • Make sure you have log-books ready to support motor vehicle claims. Note that travel from home to work cannot be claimed unless you are carrying heavy tools. If you have travelled more than 5,000 km for work-related activities, you will need a summary of your vehicle running costs, such as fuel, repairs, insurance, tyres and batteries.
  • Depreciation on your vehicle can also be taken into account in a motor vehicle claim. Your accountant will need to know when you purchased your vehicle and its cost.
  • If your work clothes are occupation-specific, protective or have your employer’s logo on them, you may be able to claim deductions for purchasing and laundering them. Remember to keep receipts for purchases of these types of clothes.
  • Keep the premium notice for your income protection insurance so your accountant can get the details of the insurer and policy number to claim the premium as a deduction.
  • If you are self-employed and want to claim superannuation contributions as a tax deduction, make sure you have the details of the fund name, fund tax file number, fund ABN, your membership number and the last date you made a contribution. If you work part-time, you cannot claim a deduction unless your employment income is less than 10% of your total assessable income plus reportable fringe benefits.
  • If you own a rental property, have a depreciation schedule prepared by a professional quantity surveyor to maximise depreciation and capital allowances. If you have not had this done before and the quantity surveyor shows additional items relating to a previous year that you have not yet claimed, you can amend up to three years’ returns to claim the additional depreciation.


  • Review your debtors and write off any bad debts before 30 June.
  • Review your asset register and if you are considering scrapping any plant and equipment, do so before 30 June.
  • If your turnover is less than $2 million, buy any items of new plant and equipment worth less than $1000 for an immediate deduction.
  • Review your trading stock to remove any obsolete items and get a tax deduction for them.
  • Pay employee superannuation contributions for the June quarter before 30 June to get a deduction this financial year.


  • If possible, prepay interest on borrowings for investment (such as for investment properties and margin loans). Check your borrowing contract to see if this is possible.
  • If you run a small business and your turnover is less than $2 million, you can get a deduction for anything that is going to be used within 12 months. This can cover office supplies, rent, maintenance contracts, insurance and lease payments.
  • If you own a rental property and are considering significant maintenance expenditure, make sure it is completed before 30 June for a deduction this year.


  • If you invoice for your services on a regular basis, consider deferring invoicing for work done in June until after the beginning of the new financial year.
  • Structure investments so that income is not received until after the beginning of the new financial year.


  • Review your investments and consider whether there are losses to be realised to offset any capital gains made during the year.
  • If you are considering selling an asset that will result in a capital gain, defer it if possible until after the beginning of the new financial year.
  • Be careful of “wash sales” – that is, selling an investment in listed shares to crystallise a loss and then re-purchasing it at a later stage (either in the same or a different entity). These deductions could be disallowed and could be considered to be a tax avoidance measure. Note that this does not seem to apply if you have sold the shares to your self-managed superannuation fund. If you are in doubt, speak to your adviser.
  • If you are considering realising an asset that will result in a capital gain and you have not held it for 12 months, defer the sale if possible until you have held it for 12 months. This allows you to access a 50% reduction of the capital gain that must be declared.

The above list is by no means comprehensive and is meant to be a general guide only. Speak to your Bongiorno adviser to find out other ideas that apply to your circumstances.

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