As I walked across to the coffee shop on a recent morning, I noticed that the gym next door had an end of financial year (EOFY) sale.
That set me wondering: why on earth would a gym have an EOFY sale?
The whole point of EOFY promotions surely is that they spruik items to taxpayers who might then be able to claim a tax deduction.
But, as a tax adviser, I can report that it is almost impossible to claim a tax deduction for a gym membership.
That gym promotion highlighted a wider point about EOFY promotions.
In a retail environment where competition is king and sales of one sort or another seem to be an almost constant fixture, consumers need to be very wary indeed of EOFY deals.
Just because a retailer advertises an EOFY deal doesn’t mean there will be any tax benefit for you.
The golden rule is that you (or your business) can only claim a tax deduction if the expense relates to your job or business.
So a retailer selling stationery, office equipment or technology items might have a reasonable call on your tax-deductible dollars; a retailer flogging swimming pools, home furniture or baby wear probably does not.
If you can’t see the link to your work or your business, don’t fall for the EOFY patter.
In addition, even if you’re eligible for a tax deduction, don’t buy something you don’t need. You have to spend a dollar to get the tax element back (up to 30c in the dollar for a company or up to 45c in the dollar for an individual) so you still end up out of pocket.
If your business really does need that new laptop computer, head out and buy it, bank the discount that the retailer is hopefully offering and claim the tax deduction.
But if you’re only buying the laptop to take advantage of the good deal and to lock in a tax break, walk away now because the end result may be an unused computer and a depleted bank balance.