Tips for saving at tax time

A DOLLARsaved from the taxman is ours to keep forever, plus the earnings compounding from it in future years. So it’s well worth a little effort to find ways to reduce our tax or increase our refund. Arranging our affairs to legally reduce the tax payable is entirely legitimate.
Nanjing Night Net

Options are available for the self-employed, small business, employees and investors. There are now only days left in this financial year to act.Self-employed people and small business owners can claim tax deductions for superannuation contributions. The limits are $30,000 for those under age 50 and $35,000 for those 50 and over. This not only reduces tax but boosts retirement savings.

Small business owners can prepay rent, property expenses, loan interest, equipment and vehicle leases, IT service contracts and other genuine expenses for the next year. They will need to prepay again next year to remain in front but next year may not be as profitable.

TAXING DECISIONS: Who doesn’t want to save some money, especially when it comes to tax time? All it takes to legally reduce the payable tax is a little bit of planning. Photo: FILE PHOTO

Primary producers can defer income into Farm Management Deposits until a later year. This is only a deferral with the income having to be included in future tax returns, but future years may not be so good.

Business owners can spend up to $20,000, or $22,000 including GST, on plant, equipment, machinery and motor vehicles needed for their businesses and claim the deduction in full immediately.

There are also options suitable to many employees. Workers with income below $35,454 who contribute $1000 to their super fund without a tax deduction will earn a $500 contribution from the Government into their fund. If their income is up to $50,454 they receive a part payment.

Employees who contribute to the super fund of a low income spouse can earn a rebate off their tax bill. The maximum tax rebate of $540 is available for a contribution of $3000 if the spouse’s income is below $10,800 per annum. Income up to $13,800 – part rebate paid.

All investors are entitled to tax deductions for prepaid investment expenses. These could include interest on loans taken to buy property, shares or managed funds. Prepayment of maintenance and other costs associated with investment properties would qualify.Investors with shares and funds who have sold some at a profit this year can sell others that are showing losses to offset the gains.

They can even buy them back later if they wish.People who have sold a property at a profit should speak to their advisers about options to reduce capital gains tax.Income protection insurance premiums are tax deductible.

Those who have policies must remember to claim deductions.They provide peace of mind in the event of accident or illness.

This story Administrator ready to work first appeared on Nanjing Night Net.

 

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