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Shark Tank judge and Red Balloon founder Naomi Simson’s tips for tax time

Jun 01, 2015

THE end of the financial year is fast approaching, and it’s time to take advantage of available deductions and other tax-related benefits while you still can.  

It’s also a good time to start thinking about the year ahead and how you can set yourself up to make the most of those benefits in future.

Retailers and service providers often use this time of year to promote their wares and spruik unmissable offers, but whether it is June or January, there’s no point in buying something unless you really need it or have budgeted for it.

“I would not tell anybody to start something because tax time is coming up,” entrepreneur and star of Channel 10s Shark Tank Naomi Simson says.

She is passionate about people creating their own path to financial independence.

“The next tax year will roll around just as quickly, so set up a financial plan that will be beneficial long term and seek advice from the experts,” Simson says.

With that in mind, here are some financial matters to consider before June 30 and in preparation for the next financial year.

SUPER BONUSES

It’s not too late to top up your retirement savings through salary sacrifice.

You can make pre-tax payments into your super fund of up to $30,000 a year (or $35,000 if you are over 50) at a tax rate of just 15 per cent rather than your marginal tax rate.

The contributions limit includes your employer’s 9.5 per cent super instalments, and you can only organise salary sacrifice for wages you have not yet received.

Setting up a salary sacrifice arrangement now will put you in a good position for next financial year and beyond.

If you earn less than $35,454 this year you can add $1000 to your super and the government will kick in $500. “That’s free money,” says Adrian Raftery, senior lecturer in Financial Planning and Superannuation at Deakin University.

If your spouse earns less than $13,800 you may be able to receive a $540 tax offset if you pay $3000 a year into their fund.

 

DRIVE AWAY

The end of the financial year is a great time to get a car deal as salesmen have incentives from manufacturers to clear stock before June 30. If you were planning to buy new wheels, now is a good time to do it

Even better, says Raftery, for people who use their car for work, is to keep a log book of all the trips you make, retain petrol receipts and collect other annual payments such as registration and insurance.

“You need to maintain a log book for 12 weeks so you could start (this week) and continue it for the next 11 weeks,’’ he says.

WRITE DOWNS

A lot of people start thinking about tax deductions too late but there is a way to be smart about the end of financial year if you work from home or incur business-related expenses.

Plan ahead and buy all the stationary, printer cartridges even pay for broadband and phone plans in advance of June 30 to use them as deductions this financial year, Raftery says.

But don’t race out and spend up for the sake of a tax deduction unless you have the income to deduct it from.

Tax deductions make no difference if you are operating at a loss.

 

 

INVESTMENTS

Hanging onto shares may be a good idea.

‘‘If you hold shares for 12 months you only have to pay half the capital gains tax on any profit you make when you sell them,” says Raftery.

He advises, depending on the market, holding out at least 12 months

Try to book losses from investments — if you have any — in the same year as gains to balance out capital gains.

Simson says you need to think long term about how to build your asset base.

“The greatest asset for most people is their own home. As far as tax goes it is the most advantageous (place to invest),” she says.

Simson says buying her first property aged 22 when interest rates went to 16 per cent forced her to save and taught her exactly where her money was going.

START SAVING TODAY

Original article posted in The Daily Telegraph on 1 June 2015

 

Tags: 101 WaysAccountant SydneyChartered AccountantDeductionsSuper

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