June 30 is rapidly approaching and it is time to do some urgent tax planning.  Adrian Raftery, author of 101 Ways to Save Money on Your Tax - Legally! 2012-13 edition (Wrightbooks, June 2012, AU$24.95), gives us some excellent tips for you to action and maximise your tax refund this year.  

1. Prepay private health insurance

From 1 July, the 30 per cent rebate on private health insurance premiums is going to gradually phase out for those who earn over $84,000 (single) or $168,000 (couple).  For those earning above these levels you can still get the rebate in full for the 2012/13 if you prepay 12 months of premiums before 1 July despite the rules changing.

2. Family trust resolutions

After years of abuse, this year it is mandatory for those with family (or discretionary) trusts to have a written trustee resolution before 30 June showing the intended distribution of income to family members.  Careful tax planning is required otherwise it may cost your family thousands in unnecessary (and unwanted) taxes.  

3. Super co-contribution

An oldie but a goodie but I still get shocked each year when I hear how few people actually take advantage of this extra $1,000 from the Government.  If your income is under $31,920 and you contribute $1,000 post tax into super the government will match it dollar for dollar.  Whilst this incentive gradually phases out above this figure at $61,920, it’s free money!  Also, if you earn less than $10,800 then your spouse can put up to $3,000 into your super fund and they will receive an 18% rebate ($540) on tax via the spouse super contribution rebate.

4. Car log book

If you use your car for work purposes and keep a log book for 12 weeks then the deductions can be in the thousands.  Make sure that you keep all costs associated with the running of your car (such as petrol, insurance, registration, servicing, lease payments) for the whole year, not just the period that you kept the log book. 

5. Don’t buy business assets til after 1 July

For years, accountants have been telling small business owners to rush and buy assets before 30 June, particularly where there is a 100 per cent write-off of new assets under $1,000.  However, the rules are changing from 1 July and small businesses will be eligible to immediately write-off new assets that cost less than $6,500.  Businesses will also be able to claim the first $5,000 on any new vehicles purchased after 1 July.

6. Minimize capital gains tax (CGT)

The share market has had a roller coaster year in 2012.  If you made a nice capital gain or two earlier in the financial year then you can reduce CGT by selling any non-performing shares that you may be currently holding. Any unrealised gains should be sold after 1 July to defer tax for another year.  And remember that if you hold shares for more than 12 months you reduce CGT by half.

7. Salary sacrifice into super

For those under 50 years of age you can contribute up to $25,000 per year into super which is only taxed at 15%. This figure increases to $50,000 if you are over 50.  Build your nest egg quicker rather than paying up to 46.5%.  

8. Prepay interest

If you are expecting that you will have a lower income next year (due to factors such as maternity leave or  redundancy) then why not prepay interest for up to 12 months in advance before year end on your rental property or margin loan and reduce your higher income this year.  

9. Keep your receipts

With the ATO continuing to ramp up their audit activity yet again it is important that you keep your receipts.  The ATO motto is no receipt = no deduction so you could be costing yourself $$$ by not keeping those dockets!

10. Get a great accountant

Avoid paying too much in tax or leaving yourself to a visit from the taxman.  Great accountants are like surveyors ... they know where the boundaries are.  And their fees are tax deductible!

You now have got some great tax tips, it’s time to take action.  Times are tough so every dollar saved counts. 

These tips were provided by Mr Taxman, Adrian Raftery, author of 101 Ways to Save Money on Your Tax - Legally! 2012-13 edition (Wrightbooks, June 2012, AU$24.95RRP).

 
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