As the end of the financial year fast approaches, so does the need to get your financial affairs in order. No-one likes paying tax and there are many strategies that can help you minimise your tax liability. But just remember, you need to act by 30 June 2014.
Here are a few of the strategies you may wish to consider and discuss with your Vantage Partners adviser.
Investments
Prepaying interest
If you have an investment loan you can arrange to prepay the interest on that loan and claim a tax deduction in the same year the interest has been prepaid.
Capital gains
If you are considering selling an investment in the final few months of the financial year that will give rise to a capital gain, it may make financial sense to hold off and sell the investment in July. That way, you will defer paying the capital gains tax for another year.
Small Business
Employee Superannuation
Payment of your employees' super for the June quarter is due on 28 July. However, as an employer you are not entitled to a tax deduction for super until it is paid. Consider paying all of your employees' super by 30 June 2014 in order to claim a tax deduction this year.
Write off bad debts
If you have issued an invoice to a customer and have since discovered that the customer will not be able to pay the invoice, write the invoice off by 30 June 2014. Otherwise you will pay tax on income that you won't actually be receiving.
Superannuation
Contribution caps
You are able to make concessional contributions up to the following caps with regards to the year ended 30 June 2014:
|
Cap for those aged 59 years
or over
on 30 June 2013
|
Cap for those aged 58 years
or under on
30 June 2013
|
|
$35,000
|
$25,000
|
If you haven't already, it may make financial sense to contribute up to your respective cap by 30 June 2014.
Super Co-contribution
If you earn less than $48,516 (including reportable fringe benefits and reportable employer super contributions) you may like to consider the Governments' super co-contribution scheme. Depending on your income, the Government will contribute up to $500 into your superannuation account if you make a personal super contribution.
Spouse super contributions
Making contributions into a super fund for your spouse can provide significant retirement income benefits. You may also earn an annual tax offset of up to $540 on the first $3,000 per annum of contributions if your spouse has assessable income (including reportable fringe benefits and reportable employer contributions) less than $13,800.
