It’s fast approaching, and you may be thinking about ways you can boost yourself financially before the financial year ends. We have prepared our top 10 list of ideas.
- Get up to $500 from the Government Co-Contribution. If you earn less than $37,697 and make an after-tax super contribution of $1,000 to your super, you may be eligible to receive a government co-contribution of $500. If you earn $52,567, you can still receive a partial contribution. See the ATO’s webpage on super co-contributions for more details.
- Contribute to superannuation and claim a tax deduction for the contribution. You can contribute up to $25,000 in pre-tax, salary sacrifice or “concessional” contributions. The contributions made by your employer are included in this cap. If you have an unused cap, you can lower your taxable income and boost your future finances.
- If you are a member of a couple where one of you earns a low or no income you. Consider a Spouse super contribution. When you contribute $3,000 to the low income earning spouse’s superannuation, you can receive a tax rebate of up to $540. See the ATO’s tax offset for super contributions on behalf of your spouse to find out more.
- Protect your biggest asset – your income. If you have a job, chances are you need the income it brings. Income Protection Insurance can secure your income against unexpected illnesses or injury, and the premiums are generally tax-deductible. This only applies to cover you pay for personally and not held through a super fund.
- Invest in yourself. If you have been considering undertaking study that’s related to your current area of work. Consider furthering your education as you can typically claim back some of your study related expenses. Upgrading your qualifications may give you the boost you need to request that pay rise or go after a promotion you’ve been eyeing off, which will increase your income.
- Prepay tax-deductible expenses – including income protection premiums and interest on investment loans – to bring forward the tax deduction to this financial year.
- Review your private health insurance. Singles earning more than $90,000 and couples earning more than $180,000 who do not have private health insurance are generally subject to the Medicare Levy Surcharge of between 1% to 1.5%. Depending on your situation, the surcharge may be more expensive than taking out a basic hospital policy. Don’t fall for salesly comparison websites. The best place to go to do your research is the government site www.privatehealth.gov.au
- Get up to date on what you can claim. You may be able to claim expenses such as Vehicle and travel expenses, clothing and, laundry expenses, donations, home office costs, union fees, tools and other equipment. For example, did you know that if you purchase a handbag and use it to carry your laptop to and from work, it could be deductible expenses? The ATO’s website has more information and fact sheets about eligibility requirements.
- Get organised. Make sure you are prepared for tax time. Have a plan for storing your receipts, whether it is a folder in your emails, a physical file, or using an app or software to keep track. The ATO has an app that helps you take photos of receipts and even track kilometres travelled for work. The better your record keeping, the better your chances of not missing allowable deductions, even better you’ll have proof, should your deduction be queried.
- Speak to a professional. Tax accountants fees are generally tax deductible, and if your financial affairs have any degree of complexity are a must. Financial advisers can help you plan ahead and put a strategy around maximising your super contributions, tax efficient investments and keeping you accountable to your goals and avoiding mistakes.
Don’t leave it too late to sort out your end of financial year arrangements. The above information is general in nature only. For advice to suit your individual circumstances, seek qualified advice.
What is your top take away? Comment below to let us know or share your own tips
