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.
More like this
Federal Budget October 2016 update
A number of key superannuation changes were announced in the Federal Budget on Tuesday, 3 May 2016. Continue reading
Super tips for your super in your 20’s
Understand from the perspective from a person in their 20's Continue reading
Exclusive partnership with financial media veteran
NGS Super is introducing an exclusive member-only finance and investment portal. Continue reading
Federal Budget 2016 update
Federal Budget announcements and what some of these changes will mean to you. Continue reading
Busting the jargon
There are lots of terms to grasp when it comes to super. Here’s our guide to some of the most commonly used words. Continue reading
Concerned about the share market?
Before you switch into a more defensive investment option, make sure you understand the ramifications Continue reading
Income protection insurance: the employer’s guide
Income protection insurance facts from an employer’s point of view. Continue reading
10 ways to boost your super and save money
Boost your super and save money with these ten tips. Continue reading
Women and super
Why women should spend a little less time doing things for everyone else and a little more time planning for their retirement Continue reading
Meet our NSW financial planners
We spent ten minutes with NGS Super’s financial planners based in New South Wales Continue reading