30 Best Tax Tips from Australia’s Adviser of the Year

“The end of financial year is rapidly approaching and now is certainly the time to take steps to reduce your tax bill and put yourself in the best position for the next financial year” says Olivia Maragna, named Australian Adviser of the Year.  “All too often tax planning is left to the last minute which makes it difficult to minimise tax.” 

To ensure you are in the best possible shape by June 30, Olivia has provided her top 30 tips for your personal tax, business and superannuation fund. 

Your personal tax return

1. Prepay your expenses: By prepaying 12 months of tax-deductible expenses, you can bring the deduction forward into the 2012/2013 financial year.  A good example of this is income protection insurance but other options are prepaying interest on margin loans or investment loans.
2. Delay income: If you are able to, try to defer income until after June 30 to avoid paying tax this financial year.  As an example this may be done by reviewing term deposit maturity dates or legitimately deferring income by holding off issuing invoices until July 1.
3. Charity: If you are thinking of donating money, you may be able to receive a tax deduction for gifts and receive that deduction this financial year.
4. Repairs and Maintenance: If you hold an investment property, consider doing minor repairs and maintenance prior to 30 June.  
5. Buy health insurance if you are a high-income earner: To avoid the Medicare Levy Surcharge, high-income earners should take out private health cover.  To avoid the surcharge for the entire year, the insurance needs to be held for the entire year otherwise it will be prorated.

For your business

1. Pay super early: Superannuation guarantee payments for your staff aren’t due until July but paying these in June will give you a deduction for them in this financial year as opposed to next financial year.
2. Do you have any trusts and companies? Trusts and companies can distribute funds to recipients on lower tax brackets to minimise tax payments.  Ask your financial adviser to review your options.
3. Structure: Whether you operate as a sole trader, partnership, in a trust or company, it’s always a good idea to review your current business structure and whether this is still appropriate for your current situation.  
4. Immediate write offs: For eligible businesses, assets costing less than $6,500 can be written off immediately and applies to the purchase of assets used in a business.  Check with your accountant as to whether you are eligible.
5. Bad Debts: If you are not going to get paid, then it is best to write these off as a bad debt prior to June 30 in order to claim the tax deduction.  
6. Trading stock: A stock take is the best way to write off any lost, damaged or obsolete stock and can reduce your taxable income.
7. Stationery:  Stocking up on stationery and other consumables before June 30 can help offset profits.

Your super contributions

Super Changes

The government recently announced some changes to superannuation. All of these announcements still need to proceed through the normal political process before becoming law, thus there may still be amendments. I have outlined the most salient points and the possible implications.

Are You Considering a SMSF?

Issues to ponder

Self Managed Super funds are becoming increasingly popular, and make up a large portion of the overall superannuation pie. The reasons why you might set one up are commonly discussed but it is worth going through again.