As another tax year draws to a close, here are some things you should consider doing before 30th June to improve your tax position:-
- Bring forward deductible expenditure such as subscriptions and donations before 30th June this year to claim it as a deduction in your tax return.
- Pre-pay any deductible interest this financial year.
- See if there is any opportunity to offset capital losses against capital gains you have made during the year. Be wary of the Australian Taxation Office ‘wash sales’ ruling which specifically denies the capital loss if the sale of the asset was purely to incur a capital loss and there is an intention to buy them back again in the near future.
- Review your super contributions during the year and top up if possible. Keep in mind the contributions limits ($25,000 for those under 50 and $50,000 for those over 50 years of age) that are in place and do not go over them.
- Make a personal contribution of $1,000 into your super fund if you earn less than $60,342 and receive a government co-contribution of up to a maximum of $1,000.
- Make a non concessional spouse contribution of $3,000 into super who earns less than $13,800 and you may be eligible for a $540 rebate on your tax return.
In the past, we would have suggested, where legally possible, defer receipt of income/bonus until the following year. However for this year you may also need to consider the flood levy that the government has temporarily introduced for the 2011/12 financial year. Under this levy, those with a taxable income of less than $50,000 will not need to pay this levy. For those between $50,000 and $100,000, a rate of 0.5% will be imposed and those with income of over $100,000 will have to pay an additional 1% in tax. Those who were affected by the floods will be exempt from this levy regardless of their income.
As usual, you should seek professional tax advice from your accountant before undertaking any of these strategies. Some of the above tips may have other eligibility criteria, please talk to one of our advisers if you wish to find out more.
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