As another financial year comes to an end, it is important to consider the following tax planning options to ensure that you minimise your tax obligations.
1. Individuals & Superannuation
- Where cash flow permits ensure that you take full advantage of concessional and non-concessional caps. A reminder of the 2014 caps is as follows:
If aged between 65 and74 then you must satisfy the work test (ie: having worked for reward for at least 40 hours in a 30 day consecutive period) before being able to make any contributions.
- Important to note for planning opportunities is that the caps for 2015 will be as follows:
- For those superannuants who are in pension mode, ensure that you draw at least the minimum income stream before 30 June to ensure that the Fund retains its tax exemption on income derived from assets used to fund the income stream.
2014 Minimum Pension Factors:
- For persons who have reached their “preservation” age and not drawing an income stream from their superannuation entitlements, you need to consider your ability to combine a Transition to Retirement Income Stream with a Salary Sacrifice arrangement into superannuation. For those who are aged 60 and over, this strategy is an absolute must.
For your information, preservation age is as follows:
2. Individuals & Investment Properties
- If you currently have an investment property in your name consider the following prior to year end:
- Do you have a depreciation report for the property? If no, consider obtaining one to maximise the deduction that you may legitimately claim in relation to the property.
- Subject to cash flow, consider pre-paying the interest on the loan for up to 12 months.
- Ensure you have kept receipts for all repairs and maintenance works undertaken throughout the year.Note: It is important to differentiate between repairs and capital improvements and to understand that initial repairs on a property are not deductible.
- if selling an investment property remember that the capital gain occurs when you sign the Contract of Sale not when you settle the property. As such, if possible, do not sign a contract before 30 June if you want to defer the capital gain and have time to plan to minimise your tax position.
3. Individuals & Capital Gains
- If you have sold a capital asset such as shares or an investment property during the year and have crystallised a capital gain then:
- Consider whether you have any carried forward tax losses (either capital or revenue losses) that can be used to offset the current year gain.
- Consider whether you have any unrealised capital losses that could be realised before 30 June to offset all or part of the current year capital gain.
4. Individuals & Work Related Expenses
When claiming work related deductions over $300 in value it is important that you are able to substantiate your claims with documentary evidence such as receipts. Typical work related deductions include:
- Cost of attending seminars, conferences and other professional development courses
- Reference material including books and professional subscriptions
- Computer consumables where computer used for work purposes
- Printer consumables where printer used for work purposes
- Union fees
- Overtime meals
- Protective items such as sunglasses and sunscreen if working outdoors
- Income protection insurance premiums
- Depreciation of computers, printers, desks, chairs, carpets, blinds, home office furniture if item is greater than $300 in value
- Membership fees relating to professional bodies
- Annual registration fees for work specific occupations
- Tools of trade (must be depreciated if greater than $300)
Motor Vehicle ClaimsIf you use your vehicle for work related purposes then you may be eligible to claim a deduction for such costs. There are 4 methods available and these are:
If travel greater than 5000 business kilometres in the tax year:
If travel less than 5000 business kilometres in the tax year:
Should you wish to discuss any aspect of this or any other matter, please contact our office on 03 9626 1433