5 common traps to avoid this EOFY

So, you’ve made it through another financial year. A year of running your own business, preparing for an early retirement, chasing after school kids with forgotten lunchboxes, or even changing the odd nappy or two. However you played out the last year, there is no better feeling than when that tax return glides swiftly into your bank account, right? Well, all too often we see people get stuck in the common traps brought on by tax time, so we thought it was about time we let you know what to look out for during this month of increased disposable income. Here are the top five things to avoid this EOFY…

Leaving it too late

Like in most other cases, the earlier you consult your financial adviser in the lead up to tax time, the better! Why? Well, the more time you give yourself to discuss your EOFY strategy, the more time you’ll have to act on it. Leaving your consultation too late may result in missed opportunities to carry out your tax time plan. Financial success starts with planning, so give yourself a head start by getting in there early.

Ignoring your superannuation

While it is not uncommon for individuals to approach superannuation with a set and forget attitude, it is definitely in your best interest to make use of the extra cashflow with your future in mind. Come June 30, personal contributions and salary sacrifices will greatly benefit your future financial longevity and will assist in growing your retirement fund so that when the time comes, you are prepared, comfortable, and stress-free. So check to see if you might benefit from any of the superannuation contribution related benefits including spouse contributions, personal deductible contributions or government co-contribution to name a few. You can check out our recent blog on this here.

Going in blind

The EOFY is more often than not an extremely busy period. Taking the time to plan, organise and understand your financial position in the lead up to tax time will not only help you consolidate your strategy, but will also help you save on time and money. Avoid the notorious tax time headache and ensure you are organised for a quick and painless June 30. Common financial advice related deductions could include income protection premiums, investment related expenses and in some cases your financial advice fees – so be sure to confirm these with your tax adviser ASAP to avoid missing out on deductions.

Spending it all at once

Before committing to that fancy new car, nice pair of speakers or brand new lounge suite, it is essential to have devised a cashflow strategy for tax time. While your inbox might be full of the latest promotions and sales from your favourite stores, don’t be fooled! Chewing through your tax return is something worth avoiding, particularly when there are so many other great ways to utilise the extra funds. Speak to your adviser about alternative uses for your tax returns to help you grow your money rather than lose it!

Overclaiming expenses

One of the biggest, and most overlooked, traps during the EOFY period is overclaiming expenses. This year, the ATO have warned they will be paying close attention to those extra expenses that often fly under the radar, particularly those associated with work-related clothing and laundry expenses. Keep it simple and swim between the flags – no proof, no claim.

As always, if you have any queries, require assistance or would like to clarify any particular details relating to EOFY, please don’t hesitate in contacting me at pete@pekada.com.au.

Wealth Collective trading as Pekada (ABN 95 624 612 684), corporate authorised representative (CAR), number 1263725, is authorised to provide financial services on behalf of Communitas Wealth Pty Ltd.

The information provided on this website is general in nature and does not constitute advice. You need to consider with your financial situation and your particular needs prior to making any strategy or products decision. Pekada will endeavour to update the website as needed. However, information can change without notice and Pekada does not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time Unless otherwise specified, copyright or information provided on this website is owned by Communitas. You may not alter or modify this information in any way, including the removal of this copyright notice.