By Stephen Burns CEO Mr Tax Refund.
Tax Time is 7 days away. In an effort to reduce the tax season headache we thought we’d give you some daily short hacks as a countdown to tax refund time.
Hack 2: See if you’ll benefit from the End-of-Financial-Year sales
Ever wonder why companies like Officeworks have end-of-financial-year sales in June? It’s because they know that people ‘stock up’ on stationery and supplies just before June 30 to claim the expense straightaway.
If you’ve had a pay rise during the year, you might have bumped up to a higher tax bracket. A tax bracket is the amount of tax you pay according to your income. The aim would be to claim as many deductions as possible to ensure you drop down into the lower tax bracket, so jumping into the end-of-financial-year sales is a massive YES.
Work out which tax bracket you fall into from the tax table below. This will determine whether or not you should buy or delay before the end of the financial year.
Tax Rates 2015-16 Source: ATO
If your income is higher or the same as last year, you might be better off buying tax deductible supplies as it could move you down into a lower tax bracket.
If your income (and tax) is lower this year and you expect it to increase next year then it’s better to hold off until next year.
It’s important to speak to a tax consultant about which tax bracket you fall into for the year and the effects of purchasing supplies or stationery in the end-of-financial-year sales.