Financial year end 2012 readiness (indeed any year), will ensure you only pay the tax you are due to pay – and that you will receive your assessment without question or harassment from the ATO.
Does the preparation of your tax return find you having to pay tax rather than to receive a refund? To state the obvious, this arises when you have no tax paid, or you haven’t paid sufficient instalments to cover the year’s liability. So now you have to plan payment of the last year’s tax – and think of ways to manage your tax affairs so as to not be ‘caught short’ for the current financial year.
There are a number of ways that you can reduce your potential tax liability: not all of them are effective. Remember that for each dollar spent on a tax deductible expense, only a maximum of 46.5 cents will be saved off your tax liability – that’s right, you are short the other 53.5 cents unless you can make that dollar spent work for you!
Expenses that help get tax liability down include:-
- Work-related expenses (see your tax agent about what will be eligible for your occupation);
- Investment-related expenses – see more below; and
- Concessional expenses.
Apart from education-based work-related expenses that will potentially lead to a better-paid position; or association memberships that might assist your career enhancement through appropriate networking; most work-related expenses are expensive! They leave you out-of-pocket by at least that 53.5 cents per $ mentioned above.
Concessional expenses fall into a similar category – but have the bonus that they may have to be spent in any event, but the government has allowed a deduction anyway. You will need to watch the developments in relation to the previous government’s move to limit the amount of deductibility for these expenses, but the annual limit of $2,000 will cover most update course costs.
Get you act together with financial year end 2012 readiness now.
Investment-related expenses at least have the potential to give you some growth in the future and get a return for ‘that 53.5 cents’! Some expenses that might fall under this category depending on your personal circumstances include:-
- advice fees to financial planners;
- interest on loans raised to make an investment;
- magazine subscriptions for investment topics related to your portfolio;
- administration and platform fees paid to record and report on your investment activities;
- software and various stationery items used to manage your portfolio; and
- accounting costs.
The experienced advisers at Continuum Financial Planners Pty Ltd can assist you with developing a strategy to commence a geared regular savings plan that will meet most – if not all of the above. Our process is: to listen, to understand and to suggest solutions delivering personalised professional wealth management services. For a prompt meeting to discuss your situation, Contact Us now – or call us on 07 34213456.
