June is upon us once again! It’s time to make sure your tax affairs are in order and any important decisions are made and acted upon before 30 June. Some key things to consider:
Look at increasing your contributions to super, so you can save more for retirement and benefit from some tax concessions. For instance did you know that:
- if you are employed, you could make super contributions from your pre-tax salary
- if you are self-employed, you could get a tax deduction for the money you put into super
- if you contribute after-tax pay or savings into super, you may:
- pay less tax on investment earnings;
- qualify for a super co-contribution of $500 from the Government; or
- receive a tax offset if you contribute to a dependent spouse.
Beware though of the contribution limits as you might be subject to additional tax and charges if you exceed them. If you are contributing to super:
Ensure you don’t exceed the concessional contributions cap of $30,000 per year (for those aged 48 or under) or $35,000 per year for those older.
Ensure your don’t exceed the non-concessional contributions cap of $180,000 or $540,000 when bringing forward three-years.
Interest on investment loans
Prepaying interest on an investment loan before 30 June may give you a potential tax saving, due to the tax deduction being brought forward.
Payment of insurance premiums
You may be eligible to claim a tax deduction this financial year if you take out an income protection policy outside of your super account before 30 June.
If you hold personal insurance through your superannuation you could claim a tax deduction for super contributions made to meet premiums.
Sale of investments
Consider delaying the sale of any CGT assets, resulting in a gain, until after 30 June unless you have losses that may be lost in future years because of company or trust rules.
Offsetting capital gains tax
You can reduce the amount of capital gains tax you have to pay by making tax deductible contributions to super (if you are eligible).
Private health insurance
If you are 30 years or older you should contemplate taking out private health insurance to avoid the lifetime health cover (LHC) loading.
Superannuation pension payments
If you are receiving a superannuation pension income:
- Ensure you have met the minimum pension requirement before 30 June on account-based pensions.
- For ‘transition to retirement’ pensions ensure you do not exceed the 10% limit.
In the Federal Budget released on 12 May 2015 there were some changes that may benefit small business.
Are there any assets you had planned to purchase for your business? Small businesses will be able to fully deduct the cost of assets worth up to $20,000. Consult your tax agent about how this can benefit your business.