It’ll be tax time again before you know it, so what should you be doing before 30th June to make sure you’re prepared?
Here are five steps you could consider taking:
- Maximise tax-deductions – you may want to bring forward deductible expenses such as interest on investment loans, or Income Protection Insurance premiums. This may allow you to reduce your taxable income this financial year, reducing the amount of tax payable. This financial year employed people can make tax deductible contributions to superannuation themselves (previously they could only do so via their employer). Limits apply so if you want to save tax and boost your nest-egg, best to speak to your Financial Adviser or Accountant first.
- Get a tax rebate of up to $540 – does your spouse earn less than $40,000 a year? If so, then by making a spouse contribution of up to $3,000 to their superannuation, you may qualify for a tax rebate of up to $540. The maximum rebate applies if spouse’s annual income is less than $37,000.
- Defer tax liability – if you’re looking at selling an investment at a gain (such as shares or an investment property which has increased in value since you bought them), you may wish to consider deferring the sale until after 30 June so that the Capital Gain would be taxable in the following financial year. Note this may only be of benefit if you expect next year’s taxable income to be lower or the same as this year’s – if it’s higher, you may actually come out worse off. You also need to consider whether there’s a risk of the asset going down in value in the meantime.
- Get $500 paid into your super by the government – if you earn less than $51,831 a year and make an after-tax contribution to your superannuation of up to $1,000, then you may qualify for a Government Co-contribution of up to $500.
- Make after-tax contributions to Superannuation – Dd you have an investment in your own name, such as shares, property or a managed fund? If you cash out the investment and put the proceeds into super, you could reduce the tax you pay on your investment earnings by up to 34%.
Get organised now – avoid the last minute rush. If you start gathering your financial details together now, then you still have time to maximise these or any other strategies that may improve your financial position.
Seek expert advice
Finance and tax can be a complex area, so it’s important to get the right advice. Book in a meeting with your Financial Adviser and/or your Accountant well before 30th June, otherwise you may leave things too late and miss out.
_______________________________________________________________________ Mark Plaskitt is Senior Financial Adviser at MLC Advice Pennant Hills and an Authorised Representative GWM Adviser Services Limited ABN 96 002 071 749, MLC Financial Planning an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies.
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.