With 30 June 2014 fast approaching, it is worthwhile checking to ensure your year-end financial strategies are in place. In doing so, it may be wise to consider the following list of suggestions.
1. Consider a lump sum (Non- Concessional) investment into super
‘After-tax’ contributions are those where you have already paid income tax on it. It can be advantageous to invest through your super instead of outside super.
By investing in super, you pay a maximum of 15% tax on any earnings you make in your super account, rather than paying tax at your marginal tax rate as you would if it was sitting in a bank account, which could be as high as 45%.
You could consider making a personal after-tax contribution of up to $150,000 during the 2013/14 financial year to help boost your super (until age 65, and/or from age 65 to 74 if you meet the work test).
2. Consider pre-paying deductible expenses before 30 June
Pre-paying tax-deductible expenses before the end of the financial year may allow you to include these expenses in your 2013/14 tax return. Examples of tax-deductible expenses include:
- Premiums for Income Protection Insurance held outside of superannuation environment.
- The cost of maintenance and repairs to investment properties.
- Interest payments on Investment Loans.
3. Top-up your super with help from the Government
If you earn less than $48,516 p.a. (of which at least 10% is from eligible employment or carrying on a business) and you meet certain other conditions, you may want to make a personal after tax contribution of $1,000 to super before 30 June 2014. By using this strategy, you may qualify for a Government co-contribution of up to $500 to your superannuation fund.
4. Investment deductions
It is important to understand what is tax-deductible in relation to your investment property, shares and managed fund investments. Most of the expenses incurred with managing an investment property, for example,strata fees and council rates, are tax-deductible. This also applies to share or managed fund expenses as well as the proportionate ongoing fees for financial advice. Some of these, for example interest on a margin loan, may be able to be pre-paid one year in advance.
You need to confirm which fees are tax-deductible and can be claimed.
Contact Nick Stratus, your Solid Financial Advisor, on (03) 9500 8000 to take the opportunity of reviewing your finances for the coming fin