End of Financial Year Strategies
Although it is only May, now is the time to start looking at what you can do financially before June 30. It seems like just yesterday we put those new year resolutions on the table and now we are nearly six months into the year.
Although the majority of the end of financial year strategies have been removed due to legislative changes, there are still some simple strategies you can employ to help you financially. I have provided a brief list below;
- Prepay Interest – If you have an investment loan, you can prepay the interest on your loan this financial year so you effectively can claim 24 months worth of interest in the one year. This strategy works for those individuals who think they are going to earn more this year than next.
- Super Contributions – This is mainly for those contractors and business owners. Before the 30th of June, if you have spare cash flow it may be worthwhile contributing a portion of this money to super and claiming the contribution as a tax deduction. This is great for small business owners and individuals who are on the top marginal tax rates.
- Get all your paperwork sorted. This doesn’t sound like a strategy, but if you are eligible for a tax return you should start to get all relevant paperwork ready. The earlier you can complete your tax return, the quicker you have access to the funds which you can invest.
- Realising losses/gains – depending on your share portfolio and how it has performed over the last few years it may be worthwhile adjusting your portfolio to net off some gains against any other losses you may have.
- Tax Effective Investments – There are investments in the marketplace that will allow you to get exposure to a market (i.e. Australian Shares, Commodities) and your capital investment can be claimed as a tax deduction. These can be very suitable for certain clients, but once again you need to understand what you are investing in. You don’t make an investment just to get the tax deduction.
These are just a few of the different strategies you can implement before the end of the financial year. Consult your Accountant or Financial Planner if you want more information.