Useful tax information
Here is a checklist of items that will help you in your next Tax Return:
1. Receive up to $1,000 from the Government as a superannuation co-contribution – The Government will make an additional contribution to your super fund if you make a personal contribution of up to $1,000 before 30th June. Payment reduce on a sliding scale when your income is between $31,920 and $61,920. Consider this as up to a 100% return on your investment!
2. Income Protection Insurance ”“ This is tax deductible, so check that your level of cover matches your current income and your waiting period matches your ability to meet your costs of living until payments commence. Consider paying the annual premium before 30th June so you can claim the full tax deduction in this year’s return.
3. Purchasing Assets – Defer purchasing small assets until after 30th June. From 1st July, items that you buy up to $6,500 will be fully tax deductible. The current maximum is $1,000 so you have to depreciate amounts above this level.
4. Tax Rate Changes – Defer your income into next financial year to take advantage of the lower tax rates from 1st July.
5. Capital Gains Tax – This tax applies on the date of the contract not the date of payment, and capital losses can only be written off against capital gains. So if you are selling assets that will trigger a capital gain try and delay the contract until 1 July unless you have some capital losses that you are able to offset against.
6. Pre-Pay Private Health Insurance ”“ the Government rebate changes for many people from 1st July (mainly higher income earners) so you can claim the full 30% in this year.
7. Super Contributions ”“ The pre tax contribution (Salary Sacrifice and employer contributions) cap for those with a super balance over $500,000 will reduce to $25,000 for those over 50yo. If cash flow permits, make additional contributions but stay within the current limits.
Phil Burgess, General Manager, ITP Income Tax Professionals, Financial Accord Pty Ltd (Authorised Representative No. 333883), Hornsby.
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