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Top 9 Simple Tax Saving Strategies

Planning on giving to charity?

Make a donation now and claim the deduction this year. If you donate monthly to charities, think about paying the full year’s worth of donations upfront and take the deduction now.

Operate through a company?

If you operate through a company structure and the company has advanced you money during the year or paid expenses on your behalf, then work out whether you are going to repay the loans or put in place a complying loan arrangement. If you already have loan agreements in place from prior years, make sure that you make the minimum repayment (including interest) before June 30. If the company normally declares a dividend to cover these loan repayments, make sure the dividend is declared and set-off against the loan balance before 30 June.

Are your salary sacrifice agreements still relevant?

If you have existing salary sacrifice agreements in place, review them to make sure they are still viable. Also, if your taxable income is over $180,000, don’t forget about the debt tax.

Accelerate Deductions

For business, if cash flow allows, now is the time to accelerate deductions by paying for any required repairs, replenishing consumable supplies, trade gifts or donations before 30 June.

Delay any income

It may be worth considering delaying some of this year’s income to next year in order to reduce your taxable income this year. This will largely depend on your personal circumstances and your next years’ taxable income forecasts.

Manage Capital Gains

Thinking of selling off a profitable asset, such as shares or property? It may be worth deferring this sale until after 30 June 2014. In doing so, you will delay incurring CGT for another financial year. So while you will still need to pay the CGT eventually, freeing up short-term cash flow may be beneficial depending on your circumstances. Remember that capital gains tax is calculated on date of exchange, not date of settlement.

Trustee distribution minutes

Please ensure that you have completed minutes for your trustee distribution statements for the year. This involves detailing which beneficiaries are to receive income and how much. These need to be completed by June 30.

Distributions to charities or churches

Any distributions to charities or church’s need to be physically transferred before June 30 to have them counted in this financial year.

Superannuation

Make any super contributions before June 30. This includes any 9.25% super guarantee for employees if you want to get the tax deduction this financial year. Please be conscious that the superannuation cap for 2014 financial year is $25,000. If you are 59 or over on 30 June 2014, the cap is $35,000. If you exceed this cap, you face penalty tax rates. If you have the cash flow, it makes sense to look at making deductible or concessional super contributions before June 30. There can be significant tax savings in contributing to super as this reduces your tax income for the year and you will only pay 15% on the contributions when they hit super.

 

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