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Tax Time

Plan ahead for tax time

Glenn Fairbairn
Director/Private Client Adviser
22 Jun 2015

Tax time is just around the corner and being prepared well in advance can help reduce your tax bill or boost your return. 

Here are some simple strategies you can implement which may reduce your taxable income:

  • Maximise your pre-tax (concessional) contributions to superannuation. The current limit is $30,000 for those under 50, and $35,000 for those over 50. With a tax rate of 15 per cent on these contributions, by contributing more to your superannuation you could be rewarded with a tax saving, while at the same time building up your super balance.
  • If you are expecting a large tax bill this year due to a realised capital gain or bonus, it may be worth considering the pre-payment of interest on an investment loan – that way you get the tax deduction in the same year you have the gain or bonus.
  • If you are drawing a pension from your superannuation fund, ensure that you satisfy the statutory minimum. Failure to do so may result in earnings within your superannuation fund being taxed at 15 per cent.
  • For those who turned 60 during the 2014/15 financial year, it could be worth commencing the payment of an account based pension from your superannuation fund. Pension payments are tax free once you are over 60, and your super fund does not pay tax on earnings for that part of the fund paying you a pension. 
  • Leading up to the end of financial year may be an opportunity to contribute up to $1,440,000 to superannuation over a short period of time. For example, each member of a couple could make personal (non-concessional) contributions of up to $180k each pre-30 June and a further $540k each post 1 July.  This strategy can help those who have assets outside of superannuation, and are under 65 years of age.  It allows you to put more money into superannuation where investment earnings are taxed in a concessional manner.  Making large, non-concessional contributions also increases the tax-free benefits in your fund which is helpful in the future for providing you with tax effective retirement income streams.

The above strategies are not appropriate for everyone and need to be considered after reviewing your individual situation and objectives. Please consult your advisor regarding these strategies.

The information provided above is general information only and individuals should seek specialised advice from a qualified financial adviser. Please contact Hewison Private Wealth for more information. 

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.