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End of Year checklist

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The end of the financial year is fast approaching. It’s time to get the most out of your hard earnt dollars! Here are some tips to maximise your tax position and to help you take advantage of the concessions available to SMSFs.

General tax tips:

  • Defer receiving income to after 30 June if possible – if you are reporting on a cash basis, you receive income when it is banked.
  • Bring forward expenses – if you are intending to buy office supplies, small assets worth less than $300 or you have bills due early in the new financial year, attend to them before 30 June to get the tax deduction in this financial year.
  • Make sure you have a professional depreciation schedule prepared for your investment property – you may be able to go back up to three years to claim extra deductions.
  • Look at your capital gains made during the year – consider whether you need to sell some loss-making assets that are unlikely to recover to offset the gains.
  • If you are thinking about selling to make a capital gain, try and defer it until after 30 June so the gain falls into the next financial year.
  • If you are thinking about selling to make a capital gain and you have held the investment for less than 12 months, try and defer it until you have held the asset for more than 12 months to qualify for a 50% discount on the capital gain.
  • Pay income protection insurance premiums before 30 June to get a tax deduction for them this year.

Superannuation tips:

  • Make sure contributions are cleared through the bank account by 30 June if you want a tax deduction for them this financial year.
  • Make sure you have not breached the contribution caps for either concessional or non-concessional contributions – if there is a chance you are likely to, defer banking the contributions until after 30 June. Very heavy penalties apply if you get it wrong.
  • If your spouse earns less than $10,800 consider making up to $3,000 in spouse contributions to qualify for a rebate of up to $540.
  • If you earn less than $31,920 and have more than 10% of your income coming from employment or the conduct of a business, you qualify for a government co-contribution of up to $1,000 on a dollar for dollar basis for undeducted contributions you make.
  • If you are receiving a pension from either an account-based pension or a transition to retirement pension, make sure the minimum pension applicable to your age is paid before 30 June. If you usually pay your pension by cheque, allow time for the cheque to clear by 30 June.
  • Review your investments and investment strategy and either re-balance the investments in your fund or revise your strategy if there is a significant difference.
  • Make sure that distributions due to the fund from a related trust are actually paid before 30 June – the Tax Office considers that accrued distributions constitute a loan-back and could make the fund non-complying.
  • Make sure that if you have paid any expenses or insurance premiums on behalf of your fund, those expenses are reimbursed by the fund before 30 June, otherwise they count as contributions.

Our top tip:

Review your finances with your accountant and financial adviser before 30 June to see whether there is anything else you should be doing to maximise your tax position.

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