The end of the tax year fast approaches, which means now is the time to get your financial house in order. So here’s our list of what you need to do before 31 July to make the most of the tax deductions available to you and meet the Australian Taxation Office’s expectations.
1. Have you paid yourself enough super?
One of the best ways to get your taxable income down and at the same time give yourself a better lifestyle in retirement is to salary sacrifice a portion of your wage into your super account. For the 2013/2014 financial year, the general concessional contribution cap – which is the amount you can add to your super fund on a before-tax basis – is $25,000. This will rise to $30,000 for the 2014/2015 financial year.
This amount includes the compulsory contributions employers make on behalf of those who earn a salary. If you can afford it, it’s worth making additional contributions over and above any compulsory contributions to reduce the tax you pay and also grow your retirement next egg. But make sure you make any additional contributions well before 31 July to ensure they hit your super fund before the end of the financial year.
2. Make sure you pay for all the deductions you can this year
Now’s the time to think about all the tax deductions you can claim – if you do it just before you need to file your tax return, the risk is that you’ll forget something.
Some of the items you might need to claim include: vehicle and travel expenses (but not those related to travelling to and from your usual place of work); the cost of uniforms as well as expenses related to having them cleaned; tax deductible donations; a portion of the cost of running a home office; self-education costs and the cost of any tools you need to do your work.
3. Pre-pay what you can
If you have an investment loan, you can pre-pay interest on the loan now and receive a deduction for it in this financial year. You might also want to consider pre-paying certain insurance premiums now to receive a deduction in the current financial year. This applies to income protection insurance that is held outside your super fund.
It’s worth talking to your accountant or tax adviser now to get advice about what you can do to help minimise your tax this financial year. Don’t forget how important it is to keep accurate records of your tax information and taxable expenses to make filing your tax return as easy as possible.