Personal Tax Tips  

Personal Tax Tips 2015

With the end of the financial year rapidly approaching, now is certainly a great time to take steps to maximise your personal tax return and put yourself in the best position for the next financial year. Here are some tax tips to maximise your personal tax refund for 2015/2016.

Prepay income protection premiums and reduce this year’s tax

If you have or are considering income protection insurance, you can prepay your premiums for up to 12 months. This may allow you to bring forward a tax deduction from the following year into the current year – potentially reducing your taxable income this financial year.

Prepay investment loan interest and reduce this year’s tax

When you borrow money to make an investment that will generate assessable income (often called ‘gearing’), you’re generally entitled to claim a tax deduction for the interest on the money borrowed.

The interest you pay is generally tax-deductible in the year it falls due. However, if you have a geared investment portfolio in your own name, you may be able to prepay up to 12 months’ interest on the loan and bring forward your entitlement to the tax deduction to this financial year, depending on your personal circumstances.

Defer earning taxable income until the next tax year:

• roll maturing term deposits to a date after 30 June;
• if you plan to sell an asset, can the contracts be signed after 30 June to push the tax into the next financial year? If not, are there any capital losses available to reduce capital gains?

Bring forward deductible expenses:

• buy work related items < $300 for an immediate deduction;
• prepay interest on investment loans;
• bring forward repairs to your investment property;
• make tax deductible donations.

Review your log book for currency.

A log book will ensure you get the maximum claim for your work related travel and needs to be kept for a consecutive period of 12 weeks out of every 5 year.

Make the most of your super contributions

There are many important tax benefits associated with investing in super. But to make the most of these benefits you need to understand the different types of super contributions, and be aware of the limits (referred to as ‘caps’) that exist on how much you can contribute to super tax-effectively each financial year.

Get more from your salary or bonus – Use salary sacrifice to boost your super and reduce tax

If you’re an employee, you can often enter into a salary sacrifice arrangement with your employer whereby you choose to give up or ‘sacrifice’ part of your before-tax salary and add it directly to your super account.

Boost your spouse’s super and reduce your tax

If your spouse is on a low income, you may be able to make contributions into their super account and claim a tax offset. This contribution is a non-concessional contribution and will form part of the tax-free component of your spouse’s super account

Divide your super contributions with your spouse

Spouse contribution splitting allows you to split certain contributions from your super account to your spouse’s super account – helping your spouse boost their retirement savings. By doing so, you may be able to better utilise the taxation concessions available in retirement for funds inside super. You have until 30 June each year to split certain contributions made to your super fund in the previous financial year.

If you are an employee, salary sacrifice some of your wages into superannuation up to the contributions cap.

If you earn < 10% of your assessable income from wages & salary, make extra deductible contributions up to the contributions cap;

      Find out more on contributions:

o    Increased tax deductible (concessional) contributions cap for 50yrs and over.

o    Making after tax (non-concessional) contributions to super.

• explore your eligibility for rebates such as the spouse co-contribution and government co-contribution.
• if you are in pension phase make sure the minimum pensionhas been paid to you for this financial year.
• If you have a Self-Managed Superannuation Fund make sure all points raised in audit management letters have been addressed.

Review salary sacrifice arrangements to ensure they are still beneficial.

This article is published by Bottrell Business Consultants. This article contains general information only and is not intended to represent specific personal advice (Accounting, taxation, financial or credit). No individual personal circumstances have been taken into consideration for the preparation of this material. It is recommended that you obtain your own personal professional advice before making any financial or business decision