It’s the end of the financial year, and if you’re quick there could still be time to reduce your tax bill. If you act by June 30, here are a few ways to do it.
Make a contribution to the super fund of your low-income or non-working spouse, and you could qualify for a tax offset of up to $540 – just for growing your partner’s retirement savings. It’s a great way for you to get a tax benefit and build your partner’s nest egg at the same time. Note though, the offset cuts out if your partner earns over $13,800 this financial year.
If you’ve borrowed money to invest in, say, shares or a rental property, you may be able to save on this year’s tax by prepaying some or all of the annual loan interest. You can claim up to 12 months of prepaid interest on an investment loan – it’s very handy if you want to reduce your net income in this current financial year, especially if you think it is likely to be higher than usual. Be aware however, you usually need to have a fixed rate, interest-only loan to be able to prepay interest.
If you own a rental property it can be worth completing and paying for any repairs or maintenance on the place before the end of June. That way the expense can usually be claimed on tax this financial year. Be careful though – there’s a fine line between ‘repairs’ and ‘improvements’. General upgrades to the property are classified as improvements, and for those, you need to depreciate their cost over a number of tax years.
For workers whose tax affairs are straightforward, tax time has become a bit easier thanks to the introduction of MyTax. It’s the Tax Office’s new online tax return option, and it does most of the hard work for you, pre-filling your return with information provided by your bank, employer and government agencies like Centrelink. All you do is review the details, add any missing figures and select ‘submit’. MyTax is free, and it’s available for use on tablets and smartphones. Check out the Tax Office website for details.
While do-it-yourself tax return options are handy, around 70% of us use a registered tax agent for help completing our tax. It’s not a bad idea because our tax laws are complex and using a tax agent can help you maximise deductions while staying within the letter of the law. It can also be very cost effective as you can claim the cost of using a registered tax agent in next year’s tax return.
If you can’t afford the cost of professional tax advice, rest assured help is available. If you earn less than $50,000 annually and your tax affairs are simple, you could be eligible for Tax Help. It’s a network of community volunteers trained by the Tax Office, who can help you complete your return at tax time. Tax Help is available from July to October, and you’ll need to call the Tax Office on 13 28 61 to arrange an appointment.