Simple tax tips

Sometimes the simplest actions get the largest return and the end of the financial year is a good time to maximise your money.

Louise Biti, Director, Strategy Step has five simple tax tips for pre-retirees.

1. Salary sacrifice to super – if you are able to save some money, this is a tax effective option that may see you invest more money after-tax. If you can’t make any payments this financial year, the start of a new financial year is an ideal time to set-up such arrangements.
2. Prepay deductible expenses before 1 July – some expenses (such as interest on an investment loan) can be prepaid for the next 12 months. This allows you to speed up when you receive the benefit by claiming a deduction in this year’s tax return. Prepaying interest can also lock in the interest rate to avoid the impact of any rate rises over the next year.
3. Keep your records – you need to keep records for expenses you want to claim. This is particularly important if you travel for work, use your car for work or work from home.
4. Don’t touch super until age 60 – super withdrawals are generally tax-free from age 60.
5. Get your tax return in on time – this avoids penalties.

As well as Louise’s simple tips, you may also wish to consider:

1. Making a $1000 after tax super contribution and, if you earn less than $31,920 per annum, the government will match this dollar for dollar. If you earn between $31,921 and $61,920 the government will match a percentage of your co-contribution. To find out how much co-contribution the government will make on your behalf, click YOURLifeChoices simple shortcut.

2. If your spouse is a low income earner or does not work, consider making a spousal contribution. Based on the maximum non-concessional contribution of $3,000, you can claim a $540 tax offset if your spouse earns less than $10,800. The rebate is reduced by $1 for every $1 earned over $10,800, cutting out completely at $13,800.

3. Make use of concessional super contributions. For those under 50 years of age, $25,000 can be salary sacrificed as super contributions and for those over 50 years of age, $50,000 can be salary sacrificed as super contributions.

4. Support a good cause. Donations above $2 made to a registered charity can be claimed as a deduction on your tax return. Do a good deed and get rewarded.

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