Why Tax Time Isn’t

End of financial year salesWhy Tax Time Isn’t

It’s been nearly two weeks since I saw my last “It’s tax time! Save on tax” type advertisement… Thank goodness ! Between Tax Time ads and Election Campaigning ads I was ready to slash my wrists, but let’s not get political. This is mainly about the TAX!!

How thoughtful that these companies care so much that they’d spend their advertising dollars to help us save on tax. Here are some of My favourites…

AHM Health Insurance

efy ant 1

This TV ad features a young couple; A seemingly proactive young lady urging her procrastinating partner to sign up for private health cover before 30 June to save on tax. Instead of sliding into the couch with a confused look on his face, here’s what he should’ve said…
“Actually darling, since it’s already mid-June we probably won’t reap many tax benefits in the current financial year. Depending on our combined incomes, it may translate into a tax saving in the following financial year.”

She obviously didn’t research too hard. Health insurance is for your health. Does financial gain even compare in importance?

JB Hi-Fiefy ant 2

Truth be told I enjoy going into JB Hi-Fi! It’s full of cool stuff, even if it is staffed by teenagers who have no idea what they’re talking about. Laptops, tablets, phones and peripherals could all be tax deductible. Given the pace of technological advancement, people are upgrading their portable electronic devices more often than ever before, and they want it CHEAP. I wonder what the sales margins are like on these products? My guess is razor thin!

I’m sure JB’s are more than happy to take a hit on these kind of products just to get you into their stores (“Loss Leader” for all you marketeers out there). I’m also sure they’d much rather sell you an 80 inch TV, surround sound package, and a fridge while you’re there. Tax time is a perfect excuse for all this.

Harvey Norman

efy ant 3Similar to JB Hi-Fi, with high turnover items on sale potentially being tax deductible. Except have you ever noticed that the electronics department is located right at the back of every Harvey Norman store?? This is so they make you walk past the lovely new furniture and the smell of new leather. Damn it’s good! And makes you question your existing furnishings. I’ll just go and sit on that Ottoman for a bit…

All Car Companies

This is a tricky one… especially for commercial vehicles. A small business may be able to purchase a car for under $20,000 and claim a deduction for the entire amount. Car dealerships play on this and advertise cars for $20,000. How convenient, right? Before doing ANYTHING…efy ant 4

1. Don’t assume that you’re a small business – check with your accountant first.
2. Don’t assume that the ticket price includes all dealer charges, optional extras and stamp duty. Some dealers might include them, some might not, but they all count toward the $20,000 threshold!
3. Buying a ute, are you? Keep in mind also that the addition of a canopy or roof rack will increase the cost of the vehicle for tax purposes.

Do your research and ask lots of questions. Car dealers in WA aren’t shifting much stock at the moment anyway… so haggle ‘em down!! Because if they sell you a car, then they can overcharge you for servicing! Don’t go falling for that one either…

Conclusion

Always be skeptical of retailers “selling tax deductions” in the lead up to 30 June so its best to be informed for the years to come. Whether something is deductible or not almost always hinges on your personal circumstances.  If you’re not sure, contact Optima Partners on 08 62672200 or email us. We care about your tax affairs for the other eleven months of the year, not just in June. 🙂

 

Antony Monaldi - Chartered Accountant

 

 

 

Antony Monaldi

Snr Accountant – Optima Partners

Why Tax Time Isn’t
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