When it comes to getting the most (money) from your annual tax return, there is always a lot to think about, so we’ve provided a short checklist of options that could open the door to some opportunities. The key here is to plan ahead.
Are you ready for June 30?
Tax deductions—lower your liability
- Pay now for some of next year’s expenses
If you have some spare cash available, paying for certain expenses early could mean you also get your tax break back from the ATO earlier. Expenses that are met in July could leave you waiting more than 12 months for the return. A popular expense in this category is interest on an investment loan, but be careful because not all expenses qualify you for a tax deduction in advance.
- Cash back for some of your insurance premiums
Except for income protection, most life insurance premiums are not tax deductible at a personal level. But holding your death or permanent disability cover through a superannuation fund can achieve a similar outcome. This is an important consideration when setting up a new policy. Or in some cases you may be able to replace an existing policy with one inside superannuation, which is particularly helpful when cash flow is tight.
Super contributions—don’t waste the limits
June 30 is not just about deductions for expenses. It’s also a good time to consider the superannuation contribution limits that may be wasted if you don’t act soon, particularly as both concessional and non-concessional limits reduce significantly from 1 July 2017.
- Salary sacrifice or concessional contributions
As of 1 July 2017, the annual limit for these types of tax-deductible contributions is currently $25,000 cap, regardless of age.
If you’re an employee, this limit covers both employer super guarantee and salary sacrifice contributions. Do you need to review and adjust your current arrangements?
- Non-Concessional Contributions and Total Super Balance
Effective from 1 July 2017, the non-concessional contributions cap (ie after tax contributions) has reduced from $180,000 to $100,000 per annum.
A member’s age and total superannuation balance as at 1 July will determine the available contribution cap limit and ability to make non-concessional contributions and bring forward available over 3 year period. In addition members over 65 need to meet a work test before being eligible to make non-concessional contributions.
These are just a few ways to manage how your money is taxed. Depending on your circumstances, other options may be available. Our team of qualified financial advisers can work with you to help you achieve what is best for you this financial year. But please don’t leave it too late – give the team a call on (07) 4638 1155 to make a time today!