Now that it’s time to put in your tax return for 2018-19, you’re probably looking at all the usual deductions to claim: bodycorp, rates, water, training, uniforms. However, one of the most overlooked deductions you can make is on after-tax super contributions. Not only does it reduce your tax burden in the present, it sets you up for a more comfortable life in the future.
You can make personal super contributions to your superannuation fund and claim it in your income tax return as an income tax deduction.
How does it work?
The best way to explain it is by an example. Steven is employed as an IT Consultant. During the 2017-2018 financial year, he earns a salary of $78,000.00. Steven makes a personal super contribution of $3,000.00 to his superannuation fund.
As tax time approaches, make sure you’re ready to claim all the deductions you’re entitled to. These include the following:
Travel. You can claim for expenses relating to travel you do for work, but not usually the trip to get to and from work.
Clothing, laundry and dry cleaning. You can claim on the cost of purchasing and cleaning uniforms and other work related clothing. It needs to be clothing specific to your work (such as safety clothing or a shirt with a logo on it) and not just general black pants or a white shirt that matches a work dress code.
If you’ve been watching the news lately, you might have heard that the change in franking credit rules is going to break open the earth and swallow our retirees whole.
Or if you’re listening to the other side of politics, it won’t. So who’s right? Who’s wrong? What’s a franking credit? Let’s start with that. A franking credit is used by the Government to avoid you paying tax twice on dividends from shares. Say you invest in a company like Google. Hang on, this article is about paying tax :). Say you invest in a company like John’s Global Meat Pies. John’s Global Meat Pies pays you $700 in dividends after paying $300 in tax on that amount ($1000 in total).
The end of financial year is fast approaching! Have you started planning yet?
It is important to book in for a review prior to the end of financial year to take advantage of planning opportunities and ensure you are in the best position you can be. We can you look at strategies, take stock and look at where you are tax-wise for the year to avoid any nasty surprises come tax time.
Not sure if tax planning will benefit you? It can provide big benefits if you:
- are unsure of how to read your business financials and dont know if you have tax payable for the year
- have significant changes to you business profitability
- have sold any substantial assets like an investment property, business or shares
- have a Discretionary Trust and must document a Trustee Resolution before 30 June to avoid paying 47% tax
- are reaching retirement and are unsure of how to take advantage of superannuation strategies
- have had a change in your personal circumstances and you are unsure of how this might affect your tax
Now is also a great time to ensure you wrap up any loose ends. It is really important that any unpaid employee super or late super payments are dealt with immediately.
If you would like further advice or would like a tax planning assessment, please contact us.
Welcome to Sciacca’s News – July 2015
Happy New Financial Year! Have you got big plans for this new year? More importantly, do you have a plan for how you are going to make it happen?
Remember we’re here to help. If you need advice or someone to run things by, to make sure you’re on the right track, give us a call. This month we’re talking about :
- Why you need a financial advisor
Superannuation, insurance, investments, budgeting… is your mind already wandering and eyes glazing over?
We understand that knowing where and how to invest your money, can be confusing and overwhelming……….
- Retirement – the most important career move you’ll ever make
Heading into retirement and contemplating ending paid work, means you need to rethink the risks in your portfolio.
Are you fearful of retirement? Most of us are very anxious for what retirement means for our lives. The allure of time to spend with your family and freedom from the demanding schedule of work is matched with a new set of responsibilities – that of financial survival as a ‘sole business owner’ to your household.Retirement is a change of career, not an end of a career…………
- July checklist for employers
As an employer you need to:
- provide payment summaries to your employees by 14 July
- lodge your PAYG withholding payment summary annual report
- check you’re using tax tables applying from 1 July 2015…….