Our EOFY tax tips are the perfect opportunity to review strategies for reducing your tax bill and improving your investment position.
This is because you can see what assessable income you have earned for the year, including any capital gains.
With the importance of this time of year for everyone who pays tax, which will be everyone reading this, these tips have also been featured in the Financial Review with our Managing Director James McFall.
Some EOFY tax tips and strategies we will always look at for our clients include:
Contribute To Super From Your Bank Account & Claim a Tax Deduction
It is now possible to simply contribute to super directly from your bank account and claim it as part of your tax return.
This allows you to add to what has already been contributed and for most people will result in 15% tax vs up to 47% tax personally.
Depending on what you contributed in previous financial years, catch-up rules were introduced on 1st July 2018.
These could potentially allow you to make a larger contribution and boost the benefits further.
These could potentially allow you to make a larger contribution and boost the benefits further.
Realise a Capital Loss
The 2022 Financial year has been strong for investment markets.
If you have an investment that is currently a capital loss, you may consider selling it to offset some gains you have realised, therefore reducing the tax you have to pay this financial year.
Co-Contribution
If you have earned less than $53,564 and make a $1,000 contribution to super, you could be eligible for up to $500 from the Government.
Entitlements are automatically calculated and paid when your tax return is lodged.
Spouse Contribution
Boost your spouse’s super and reduce your tax. To be eligible your spouse must earn less than $40,000.
The maximum contribution is $3,000, which could result in a tax rebate of up to $540 or a potential ROI of 18%.
Bucket Company Strategy
Business owners may consider diverting some of their profit to a bucket company and investing it for the longer term.
Tax payable is limited to 30% and when treated as part of a retirement plan, may be payable in the future in a highly tax-effective manner.
Business Asset Purchase
Business owners may consider speaking to their Accountant about bringing forward the purchase of equipment and other business assets, to take advantage of instant asset write-off.
To take advantage of the opportunities that exist for you, you should review your options asap.
The difference between planning your tax position well and not can make a massive difference to how soon you are in a position to retire, so if you ever wish to seek advice on what you can be doing differently to help improve your retirement prospects, speak to the retirement specialists.
