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Once again we close in on another end of financial year. Over recent times we have been delivered with a budget that seemed to have more bad news than good, but in this newsletter we have outlined some strategies to assist you in making the most of these recent announcements.
Importantly this tax planning newsletter will highlight areas to concentrate on leading up to 30 June 2012 including superannuation contributions, deferring taxable income, accelerating deductions and other tax planning measures.
We hope you all have a successful end to the financial year.
• Reducing income, this may include postponing invoicing until after 30 June. Please note that the tax office will generally require you to pay tax on income that you have either received or become entitiled to due to the completion of work.
• Capital Gains are determined by the year a contract is entered into. If you are considering selling shares or property you may wish to delay signing the contract until the new financial year.
• Maximise your deductions – this may include:
– a review of debtors and writing off any that are not recoverable.
– making superannuation contributions, if you are under contributions limits and eligible to claim a deduction (see our section on superannuation).
– review trading stock and assets schedules (see our section on business tips).
– pay professional fees or other employment or business related deductions prior to 30 June.
• Increase tax offsets:
– if you have had a year of high medical expenses, incurring additional expenses such as; children’s orthodontics, prescription glasses, etc. your offset may be increased. Out of pocket medical expenses over $2,060 are eligible for a tax offset.
– education tax refund has been replaced with the “Schoolkids Bonus” (see our section on the Schoolkids Bonus).
It is important to note that there may be reasons why you would not want to reduce your taxable income this year, but instead have the reduction in the following tax year. These may include having had low levels of income this year and therefore low or no tax will be applicable for the year.