The end of the financial year is approaching. What are your options.
Wednesday, June 16, 2021
With the end of the financial year fast approaching, it can be an excellent time to evaluate your finances and set your goals for the future.
It’s generally a time when we are more aware of our finances and motivated to take some time to review plans from a career, personal finance, health, relationships, passions and causes we care about.
With June 30 under a month away, we’ve set out some options you may consider seeking advice on to set you up for the next financial year and beyond.
Boost your superannuation
1. Add to your super and get a tax deduction
If you are employed, self-employed, or earn taxable income from other sources (such as investments), you could claim a tax deduction by making an after-tax super contribution before June 30.
2. Get more from your salary or bonus
If you are an employee, arrange for your employer to contribute some of your pre-tax salary or a bonus into super as part of a salary sacrifice agreement. This may mean you pay less tax on your salary and increase your retirement savings.
3. Convert your savings into super savings
If you have money outside your super that you’d like to invest for retirement, you could make an after-tax super contribution which may help you pay less tax on investment earnings and increase your retirement savings.
4. Get a super top-up from the government
If you earn less than $54,838 pa from your job or business and make an after-tax super contribution, you are eligible to receive a Government co-contribution of up to $500 which may help increase your retirement savings.
5. Boost your spouse’s super and reduce your tax
If your spouse earns less than $40,000 pa, you may be eligible to make an after-tax contribution into your spouse’s super account. This will increase your spouse’s retirement savings, and you could receive a tax offset of up to $540.
To use any of these strategies, you’ll need to meet certain conditions. Contribution caps and thresholds are also increasing from July 1 2021. This may impact contribution strategies and should be considered when deciding whether to contribute in FY 2020/21. One of our team of financial advisers can assess your eligibility and help you determine which strategies are appropriate for you.
Make donations to Charity
If you want to support a charity and receive a tax deduction for doing so, now is a good time to make your donation to ensure you can claim it as a deduction.
When you donate, make sure you receive your receipt via email as evidence and make your claim in your 2020-2021 tax return.
Bring forward deductions and delay income
End of the financial year is an appropriate time to bring forward tax deductions by spending money before June 30 and delay taxable income after July 1. Delaying income is particularly relevant for self-employed, business owners or investors who may be looking to sell investments for financial gain. It can make sense to defer receipt of this income until the new financial year, depending on your circumstances.
Be prepared for the next financial year
In an ideal world, we would all have our records and reports in order before June 30, but this is often not the case. If you have this in order before June 30, it makes it much easier to begin the process of submitting both business and personal tax returns before other distractions take your focus away.
Any money you are owned is much better in your pocket, so make sure you have your records in order so you can submit your returns quickly and put the money to good use.
Any advice on this website is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.