End of financial year tips
End of financial year is upon us again. Don’t look on it as that boring time of year when you have to do your tax return. Rather, look on it as an opportunity to make smart decisions about your financial future.
Here are some key areas for you as an investor to focus on to make sure you maximise your tax deductions and minimise your tax / maximise your tax refund.
There are a number of items you can pre-pay if you and your financial team decide that is a good strategy, e.g. 2014/15 income protection insurance premiums and bank interest payments.
You can bring forward tax deductible repairs and maintenance on investment properties to before June 30.
Are you using debt recycling strategies, where you can pool cash flow through an offset account to reduce the total annual interest you have to pay?
Have you maximised your allowable contributions though salary sacrifice? Limits for the 2013/14 year are $25,000, or $35,000 if you are 59 or older.
What about non-concessional (after-tax) contributions to your super? You are allowed to contribute up to $150,000 for 2013/14.
Or you could make a contribution to your spouse’s super, which could provide you with a tax offset.
If you are a low income earner – with an income of less than $48,516 in 2013/14 – you may qualify for a government contribution to your super of up to $500 if you make an after-tax super contribution of up to $1,000.
Consider buying insurance – e.g. life insurance, income protection – inside your super fund and benefit from tax concessions.
Make good use of any tax refund you receive. Don’t treat it as bonus income and splurge it on a holiday. Put it towards paying off debts or loans, or use it to boost your super.
And, of course, make sure your records are up-to-date and organised in a way to help your accountant complete your tax return.
At JDL Strategies we advise investors to do regular Financial Wealth Checks. Have you done one recently? End of financial year is a great time for one of those checks.
And don’t try to do everything by yourself. Sit down with your financial team (financial advisor, accountant, etc.) to make sure you are getting the best financial, taxation and investment advice. Need help with this? Just call us at JDL Strategies on 1300 723 580.