The end of financial year is fast approaching and if you are like me, you are trying to get everything in the best shape before the 30 June cut-off.
So no stone is left unturned, we’ve compiled a handy checklist to give you a bit of assistance in these last couple of weeks before the end of June.
Get your expenses in order
The one thing I cannot stress enough is the importance of getting your expenses in order.
Collecting expenses and receipts can often be a fiddly job but if it means you’ll have to pay less tax, it’s worth putting the time in.
Here are some common deductions for music industry professionals. Always keep these on your radar and above all, keep your receipts!
- Research materials – iTunes, CDs, movies, concert tickets (diary entry of place/band/cost if venue doesn’t provide receipt is fine), magazines, music journals, books (for lyric inspiration etc);
- Production spares – sticks, skins, batteries, leads, strings etc;
- Internet (business usage %);
- Mobile/telephone (business usage %);
- Home rent (claim for studio/home office % component);
- Electricity/heating – business % based on studio/home office;
- Motor vehicle (kms travelled for carrying gear to/from band rehearsals/meetings/
- Taxis, other transport to meetings, engagements etc;
- Management commission;
- Subcontractor musician/composer payments (eg payments made to fellow band members outside of band entity);
- Vocal/instrument lessons;
- Specific grooming costs – bear in mind this can be limited due to the income tax ruling relating for eligibility to claim clothing/grooming costs that are conventional in nature. This needs to be closely looked at and be more specifically a stage costume rather than general day to day clothing such as jeans, t-shirt etc;
- Dry-cleaning (stage costumes, on road additional costs).
And lastly is the ‘catch-all’ category – miscellaneous – which is everything else you’ve paid for and are not sure whether it’s deductible! (Keep those receipts too.)
You might also like to look for ways to bring forward tax-deductible expenses to the current financial year, such as pre-paying interest on a margin loan, or prepaying memberships for professional organisations or subscriptions for work related publications.
Top up your super
Despite the constant uncertainty surrounding superannuation, it is still an effective tax effective investment vehicle for retirement savings. So if you have any spare cash, consider making a personal contribution to super but do give me a call and seek advice if you have any concerns about the best way forward in light of the changes which come into play on 1 July.
Take advantage of government contributions
If you earn less than $35,454 this financial year and make an after-tax contribution to super, then you are entitled to a government superannuation co-contribution of up to $500. The co-contribution tapers out once you earn $50,454.
Review your investment portfolio
If you are holding some paper losses from shares or other investments, it could be a good time to sell some of those poor performers to offset against capital gains made on the sale of other investments over the past 12 months. Remember to watch out for capital gains for anything held under 12 months.
Claim rental property deductions
Residential property continues to enjoy a boom, so if you are a landlord, make sure to claim all allowable rental property deductions, including the investment loan, property maintenance and tenancy costs.
Instant asset write-off
If you are a small business with turnover below $2 million and you have been tossing up whether to invest in new equipment, then get cracking! Businesses with turnover below $2 million can claim an immediate deduction for the cost of assets up to $20,000.
And lastly, one more small thing. If you are inclined to donate to a charity, then doing it before the end of the financial year will also have positive tax implications.
I hope you found this checklist useful. As with any information we send you please do not hesitate to call me anytimeyou would like some further advice or clarity.
We are here to help you – not just tax time – but any time!