Keep more money in your pocket with these end of financial year savings tips.
The end of the financial year usually creates a certain amount of dread in most people. It either means starting to think about your yearly trip to the accountant or trawling through your shoebox/filing system looking for receipts.
However, it is also an awesome opportunity to save some money if you know how to go about it.
Buy a car
Everywhere you look there are ads for end of financial year sales. The big ones are from car dealers but you can usually find good deals on other big-ticket items as well. If you are looking to make a big purchase such as a car, the end of financial year is the perfect time to do it. Manufacturers do genuinely slash prices in June to try and end the financial year on a high. There are, however, some pitfalls you should avoid. If you see an offer for zero per cent finance, it is usually too good to be true and the seller will usually try to make the cost up some other way.
Contribute to super
The superannuation rules and concessional grants are changing from 1 July so this is your last chance to grab the full government co-contribution before it changes. If your employment income is less than $35,454 this financial year and you make an after-tax contribution to super of $1000, you are entitled to a government co-contribution of $500. If a $1000 contribution is a bit steep, you get 50 cents in the dollar for whatever contribution you make. This is free money, so make sure you grab it. The co-contribution tapers out once you earn $50,454. If your spouse earned less than $13,800 this financial year, you can claim a tax rebate of up to $540 if you contribute to super on their behalf. From next financial year, you will be able to claim the rebate if your spouse earns up to $40,000. For more information on how the super changes work after 1 July read our in-depth explanation.
Donate to charity
If you have already donated to charity this year, good on you. However, if you haven’t, now is the perfect time to dig deep and feel good about yourself and get the reward of paying down your potential tax debt or getting an extra bonus on your tax return. All donations to registered charities over $2 can be claimed as a tax deduction.
Pay it forward
If it looks like your taxable income is likely to be higher this year than next, it can be a good idea to try and pre-pay some of next year’s deductible expenses before the 30 June cut-off. Things that you might be able to pre-pay include income-protection insurance, subscriptions to some publications and services, membership fees for associations and/or conferences. You can also look at ways to delay some income to next financial year to avoid paying extra tax this year.
Reduce capital gains
If you have sold some of your big-earning investments during the financial year and are facing a capital gains tax bill, you may want to look at off-loading some poorly-performing investments before the 30 June deadline to offset the gains and lower your overall tax liability.