Paying all Bills july 1st

Discussion in 'Money Management & Banking' started by stvincets, 18th Jun, 2019.

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  1. stvincets

    stvincets Member

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    last year i dipped into my savings and paid all strata levies , telstra internet, water, council rates , all in a year advance

    It took a big chunk of my savings.
    The result was i was in credit so didnt have to pay those bills thru out the year and didnt have to plan for them.and no headaches, in some ways i fekt relief off my shoulders

    The Accountant told me it wasnt the best thing to do as you are receiving nothing for it and you could get interest on the money , but im talking about 15k for the year

    I just paid all the IP strata levies for the year, i think that ended up about 8k for all of them, then internet 12 x $99 a month etc

    Is this ok or you think its not sensible?
     
  2. wombat777

    wombat777 Well-Known Member Premium Member

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    I would think better to put the money in an offset account and have the bills paid when due. To reduce your interest bill on the mortgage.

    If you have a PPOR mortgage then use that offset account, otherwise use an offset account for your IP.
     
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  3. Gockie

    Gockie Unicycle anywhere and everywhere... Premium Member

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    If you will pay it all in advance, isn't it generally better to pay the tax deductible invoices June 30 so you can claim the tax deductions sooner and get your refund with less time (364 days) out of your accounts?
     
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  4. Gockie

    Gockie Unicycle anywhere and everywhere... Premium Member

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    Agree with this
     
  5. stvincets

    stvincets Member

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    I didn’t know about this?
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Why 1st July? It's a new tax year and you ost claim those expenses until after 30 June of the following year. It makes more sense to pay these before the end of the financial year so you can claim the cost a few weeks later.

    If it's budget discipline you need, set them up as monthly direct debits and read some books like Barefoot Investor.

    Have a chat with your accountant.
     
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  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    But merely paying something in advance doesn't mean it will be deductible. You need to have incurred expense - received an invoice.
     
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  8. qak

    qak Well-Known Member

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    Then how do people pay interest in advance & claim it as a deduction?
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    The incur it all in june by fixing the loan and paying upfront. The terms of the loan agreement would be such that they are liable for the debt up front.

    This is why you cannot simply stick 12 months worth of payments into a normal loan June and claim it all in June
     
  10. albanga

    albanga Well-Known Member

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    Yeah not sure why you or anyone for that matter would do this?

    The money is far better off in your accounts offsetting interest or if you don’t have a loan (which you do but hypothetical) earning interest from the bank or invested.

    What happens if an emergency comes up and you need access to those funds?

    If your worried about spending it then at the very least put it in another account that you don’t have online banking for and setup direct debits.
     
  11. geoffw

    geoffw Moderator Staff Member

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    It would be worth doing if you had a much larger taxable income in one year than in the next - say, CGT from selling a house.
     
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  12. Gockie

    Gockie Unicycle anywhere and everywhere... Premium Member

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    But there is no point paying it all July 1
     
  13. geoffw

    geoffw Moderator Staff Member

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    Agreed. It needs to be paid by June 30.

    I read the first post, but missed the thread title.