Are your investments tax ready?

Nobody likes thinking about tax, but a few simple steps now can help you to avoid the year-end scramble and ensure you aren’t paying more than required.

“It is all about maximising your financial position and not leaving anything on the table you are able to claim,” explains Jonathan Philpot, wealth management partner at accounting firm, HLB Mann Judd.

Get your paperwork ready

Start your tax preparation early to avoid the tax time scramble (and a bigger accountant’s bill) by checking you have any investment-related receipts on hand. It’s also a good time to revisit your investment structure, Jonathan says.

“Simple things like having assets in the name of the higher income earner are often overlooked.”

Review your share portfolio

For share market investors, it’s time to check your holdings, particularly if you have sold any shares or a company takeover has left you with a capital gain.

“Review your portfolio to see if you have any shares with a capital loss and if appropriate, you may consider selling them to offset any capital gains,” Jonathan suggests.

If you have a margin loan for your shares (or an investment property loan), think about pre-paying the interest, as you may be able to claim it in this year’s return.

However, it’s the opposite story for term deposits.

“Consider pushing any new maturity deadlines out to six months so they are in the next financial year and no more interest is received.”

Do your property repairs

You also need to act if you own an investment or holiday rental property.

“If any repairs are needed, get them done before30 June to reduce the capital gain or increase your rental losses,” Jonathan says.

For owners planning to sell, consider exchanging contracts after 1 July, as this may allow you to defer any tax until the following year.

With the ATO paying much closer attention to deductions, your tax preparation should include ensuring all your paperwork is in order. Expense claims for council rates, insurance, agent’s fees, pest control and cleaning all need supporting documentation.

For holiday rental owners, calculate how much time your property was not available for rent, as deductions cannot be claimed for any period when family or friends were staying in your property.

Make the most of super

Consider making extra contributions to your super to boost your retirement balance – and possibly cut your tax bill.

“Super is the main deduction in your tax return now and it is important to take advantage of it if you can,” Jonathan says.

There can be worthwhile benefits from making additional contributions. For example, if you earn less than $50,454 in 2015/16, making a personal (after-tax) contribution could see you qualify for a Government co-contribution.

Also think about contributing to your spouse’s super account, as this could earn you a tax rebate of up to $540.

Sacrifice now to benefit later

Think about contributing more and cutting your tax bill through a salary sacrifice arrangement with your employer. If you don’t have one in place, it’s not too late to ask about setting one up.

“Even with a few months to go, it all helps. Perhaps think about putting your salary sacrifice arrangements in place for next financial year, as they can take time for HR to set up,” Jonathan says.

It’s also wise to check your position in relation to the limits on super contributions.

“If you currently have a salary sacrifice arrangement, check you are not going to exceed your concessional contribution amounts through a bonus or extra payment.”

Little things count

Remember to claim all your small investment-related expenses such as usage of your home computer, telephone calls or subscriptions to investment magazines.

If you intend to claim any investment-related travel (such as visiting your investment property), ensure you have receipts.

Talk to the experts

To see how super may save you tax, talk to an NGS Super financial planner by calling 1300 133 177. One bonus is that any advice about your NGS Super account can be paid for from your NGS Super balance.

Information provided in this blog may have changed since the time of writing. You should confirm the information is current before relying on it.

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