It is that time of year again when you need to start looking at how much tax you have to pay and what you can do to reduce it. This year I would expect that most are carrying capital loss, but keep in mind that capital losses will not help reduce your income tax expense.
Below are some tips to help reduce your tax.
1. If self-employed make a contribution to super, check your contribution limits first to make sure you do not pay to much.
2. Pre-pay interest on your investments loans. This has two benefits, first you can claim the interest in this tax year and second you will be able to lock in a fairly low rate. Therefore hedging against interest rate rises over the coming year.
3. For capital gain look to take losses on stocks which are dogs, good time to clear out your portfolio. Alternatively if you have any stock which are in receivership look to sell these through delisted.com.
4. Review your investment structure; a new financial year is a great time to restructure your affairs more tax effectively.
There are plenty of other schemes which will allow you to reduce you tax bill but the above four are the sensible ones. It is so easy to be caught up in tax reduction schemes that you lose sight of the bigger picture and end up losing money as well. Do not get caught in the trap, paying tax is not the worst thing that you will do financially.
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