EOFY tax time planning

Smart tax strategies

As we approach the end of the financial year, there are a number of smart strategies you could consider to help you streamline your finances and legitimately save on your tax bill.

For guidance as to which strategies best suit your personal situation and how to implement them contact our team on 8850 3333 or email obrien@obbc.com.au

Insurance premiums
Some insurance premiums, such as those for income protection insurance, are generally tax deductible as the proceeds in the event of a claim are taxable to you.

Work-related expenses
Don't forget to keep any receipts for work-related expenses such as uniforms, training courses and learning materials, as these may be deductible for tax purposes.

Prepay investment loan interest
If you have an investment loan, you can prepay up to 12-months' interest in advance. You may be able to claim a tax deduction for the prepayment in this financial year (subject to the relevant prepayment rules), further reducing your taxable income. This may work well if your total taxable income is going to be lower in the next financial year. Consult your tax agent to learn more.

Tax deductions for investment expenses
Expenses you incur while earning assessable investment income may be tax deductible. These expenses may include account-keeping and management fees and interest payments on investment loans. Claiming a tax deduction for these expenses could reduce your taxable income for the financial year, although not all expenses are immediately deductible. Your tax agent can help you determine what can be claimed.

Review ownership structure of investments
Transferring the ownership of your investments to your self-managed super fund (conditions apply) or to your spouse, if they are on a lower marginal tax rate, may reduce the tax you pay on future investment income and capital gains. However, these transfers may have capital gains tax (CGT) implications so you should seek qualified tax and legal advice before proceeding.

Managing capital gains
It's important to assess if you have made any capital gains or losses from your investments. The most common way you realise a capital gain (or capital loss) is by selling assets such as property, shares or managed fund investments. Managed funds also distribute capital gains which you must report in your tax return. The Australian CGT system is quite complex so it's important to consult with your tax agent.

Timing is everything
Some of these strategies can take time to plan and implement.

So stay ahead of the curve and get in touch with your O'Brien Advisor soon to find out how you can plan to get the most out of this end of financial year. Ph 03 8850 3333 or email obrien@obbc.com.au.

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