Some of the best advice I can give to give to clients is to speak to us before the year finishes so that we can have an impact now on the tax that you are going to pay and putting in places strategies now that will directly impact your tax. Whilst there are things we can post year end to lower the tax that you pay, these pale in comparison to the tax savings we can have by doing things now.
One of these is to look at your interim figures for the year; you should have recently completed your March BAS and will have a fair idea about how the year will go. Make some assumptions for how you think the last few months will go and send these through to us. We can look at these and discuss with you what we can do.
See below for some tax tips
1. Contribute to superannuation
You can save tax by contributing money into your superannuation. Note that these must be receipted by the fund pre 30 June to obtain the tax deduction in the 2016 year. If it is receipted 1 July, then you get the deduction, just in the 2017 year though.
Did you know that you are able to contribute up to $30,000 into your superannuation fund, $35,000 if you are 50 and over? How many of you are really planning for your retirement and maximising these amounts?
2. Timing of capital gains/losses
If you have made a large gain on the sale of an investment and hold other investments that are making quite a loss for you, it may pay to cut your losses on that investment now and then use the losses made on this to offset the gains previously made. Capital losses can only be offset against capital gains, therefore if you happen to sell a loss making asset in the next year and have no gains to offset it against, these losses will just sit there and not be utilised.
3. Timing of your expenses
Where cash flow permits, bring forward any deductible expenses now to be used against the income this year. This is especially beneficial if your income in 2016 has been significantly higher than expected and will be higher than 2017’s income is projected to be.
You can even prepay some of your expenses such as insurance, rates and interest on loans. Obviously cashflow constraints can restrict what you pay, but timing your payments correctly can save you a lot in tax.
4. Depreciation schedules
For those of you with rental properties, if you have not had a depreciation schedule prepared for your property, why not? You could be missing out on thousands of dollar’s worth of deductions. A depreciation schedule needs to be prepared by a quantity surveyor and this expense is tax deductible! We can even go back and amend some previous returns if you have been missing on these deductions.
With interest rates being at an all time low, you may be thinking about refinancing but are worried about some of these termination fees that the banks are charging when doing so. These are deductible to you in the year that you pay them. Therefore don’t be afraid to look at the real cost of breaking this loan now to get into a new loan with better terms for you.
6. PAYG Withholding variations
Why wait until the end of the year to get your refund from your investment property back when you can get part of it each week in your pay? From May onwards we are able to lodge the variations for you so that this facility is in place come 1 July so that you are getting your refund back early. Make this money work now.
7. Motor vehicle deductions
From 1 July 2015, the ATO cut back on the number of car claim methods available to taxpayers from the previous 4 methods to now just two – being cents per km and the log book method. For those of you previously using the 12% of cost or 1/3 of actual expense methods, you need to get moving on your log book to continue to claim car expenses in your tax return.
There are many other questions that we are able to assist our clients with, some of which are below. Should you wish to discuss these or any other pressing query, please contact our office for an appointment today:
Contact us if you would like to
• review & discuss your current tax situation ..
• structuring your next investment property.
• planning to legally minimise your tax position or just to explore the possibilities
• Capital Gains on selling a previously Main Residence. .. estimate tax
• Is your Self Managed Super Fund ready to acquire a property
1. with limited recourse loans
2. from lending institutions or yourself
• prepare your next tax return or application to reduce your PAYG
We look forward to being of service. We also look forward to your referrals.