Last minute tax planning advice
It’s that time of year again, the end of the financial year is almost over. There are still plenty of tactics and tips we want to share that can help you save money and pay the correct amount of tax for the 2014-2015 year end. Our Caulfield accountants here at Hillyer and Riches are ready to assist you with any of your business tax or personal tax questions.
It’s always best to start early and adopt smart tax strategies in July to ensure that you can take advantage during the entire year. It’s worth mentioning that proper planning is not just about making deductions, it’s more about looking at your entire situation and current circumstances so you can plan your associated income and expenses.
Here are some possible tips that may help you save some money on taxes, even though they are last minute.
Any expenses from a rental property can be claimed in full or in part if done before June 30. If there are maintenance issues or repairs needed, the payments can be brought forward into the 2014-2015 year.
Pre-pay investment loan interest
If you have extra cash, you may can negotiate with your finance provider to pay interest on loans upfront. This would allow for the deduction during this financial year, as most taxpayers can claim deductions up to 12 months ahead.
Please note that this may not be available on funds you redraw from one loan to put towards other purposes. Also the National Rental Affordability Scheme payment is not considered assessable income, so the deductions on these properties might need to be apportioned. Our accountants can help you with this if you need more information.
Bring forward expenses; defer income
Bring forward any other expense deductions that you may have into the 2014/15 financial year. If you plan on working less next year (going part-time or taking maternity leave) you will have less taxable income, so you will probably be better off taking the deduction in this current year.
This is not always the case. If you plan to earn more money next year, then you may want to delay any tax-deductible payments unit the next financial year. Making a solid tax plan is the key to achieving the greatest tax benefits with your specific circumstances.
Planning ahead tax tip: In July, place money into a term deposit where the maturation date is after June 30. The interest accrues in the following tax year.
Use the CGT rule to your advantage
If you have made any capital gains from your investments, think about selling any that made a loss before the June 30 deadline. The gains then can be offset against your losses, thereby reducing your overall taxable income.
Of course you want to make sure that selling is the best course of action – do not solely consider the tax benefits. Our office can help you determine which strategy best suits your particular needs.
No one knows your situation better than you, so you will know if any of these tips will apply. Your tax agent and our Caulfield Accountants at this office can help you identify allowable and appropriate deductions. Don’t forget that accountant fees are also an allowable deduction in the year it is paid.
Every individual tax payer must lodge their tax return before October 31. In general, tax professionals are given a longer deadline and this may be handy if you have tax payments due.
Hillyer Riches Management Pty Ltd is a Corporate Authorised Representative (No 466483) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. AFSL / ACL No. 223135.This document contains general advice only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.