We all hate paying tax, but if you have to pay it, pay a little as possible.
Just the title of this article fills your heart with joy and makes you want to read on. I think of tax this way, if you are not paying it you are not making any money. However, there are things you can do to help reduce how much you pay. As we move into May now is the time to start thinking about what you can do. Here, are a couple of tips for you. Please note that these are in preference of what I think you should do.
1. Sell out those shares in your portfolio which have been dogs all year and you held on to them in the vain hope that they would recover. Book the loss now and save some tax, at least they have done something for you.
2. Prepay the interest on your margin loan for the next year, this gives you a nice tax deduction for this year.
3. If self employed of an unsupported person make adeductible contribution into your super and claim the deduction. Thisis a very effective tax strategy but not open to all of us.
4.Tax effective investments, yes, tree investments. You may remember thata couple of weeks ago I wrote an article about the pit falls of thesetype of investments which is why they are last on my list but still ifyou are comfortable with the lower return and have exhausted all of theabove ideas then this may help you out.
Please do not leave your tax planning until June, get in and speakto your adviser about this in May, rest assure we will be raising theissue with you shortly.
Other issues to keep in your mind at this time of year iscontributions to super, if they suit you make sure you do the following:
1. Co -contribution - if your income is low enough you can contribute $1000 into super and the government will put in $1500.
2. Spouse contribution so you can claim the rebate.