End of Financial Year – List of Things to do

By Jason Fittler

Below is a list of financial matters to consider before the end of the financial year. Do these today and reduce the stress in the last weeks of June.

  1. Capital gains tax – it is time to look at your investments to see if you have any capital gains this year. If so then first see if you have any carried forward losses from the previous years which you can use to off set the gains. If not, then take a look at your investments to see if there are any shares you would look to sell to off set these gains. Be careful not to sell a quality share just to book the loss. Finally do not look to sell and buy back the same shares just to book the loss, the ATO will disallow these type of trades. 
  2. Concessional Contributions – these are the payments your employer makes to super and any salary sacrifice contributions you make. First make sure you have not exceeded your caps. If under age 50 it is $25,000 per annum, if over age 50 it is $50,000 per annum. Please note there are rules if you are over age 65 so make sure you check with your adviser first. If you have gone over your caps get it sorted before 30/06/2012. If you have not, think about making more deductible contributions to help reduce your taxable income and therefore the amount of tax you pay.
  3. Non Concessional Contributions - these are the payments you make from your after tax income. First make sure you have not exceeded your caps. You can make a maximum of $150,000 pa or $450,000 in a three year period. If you have gone over your caps get it sorted before 30/06/2012. If you have not, think about making more non-deductible contributions to increase your super balance in preparation for retirement.
  4. Co-Contribution - is a government initiative to help eligible individuals boost their super savings for the future. If you are a low or middle-income earner, you can take advantage of the super co-contribution payment by making eligible personal super contributions to your super fund or retirement savings account (RSA). The government will then match up to $1,000 of your personal super contributions. If you’re eligible, all you need to do is make personal super contributions to your super fund or retirement savings account and lodge an income tax return. The maximum super co-contribution payable, and the way we work out this amount depends on the income year in which you made your eligible personal super contributions, and whether your total income falls between the super co-contribution incomes thresholds for that year.
  5. Prepay Interest – if you have an investment loan you may consider prepaying the interest of the 2013 tax year. This will bring forward this expense into the 2012 tax year giving you a larger tax refund. This strategy is best for individuals on high incomes who want to reduce the amount of tax they pay. Note that this strategy only defers tax.
  6. Salary Sacrifice – it is time to speak with your employer and review your salary sacrifice strategy. If you are over age 50 and have been salary sacrificing up to your age based limit of $50,000 pa, then you need to reduce this back to $25,000 pa in line with the new caps as per the May budget of $25,000 for everyone.

Always make sure you speak to your adviser first before acting on any of the above ideas. It is important that you act in your own best interest and speaking with your adviser will give you peace of mind that you have not made a mistake.

For more information please contact us on 07 4771 4577.