Taxation planning – Seeking The Right Advice Come Tax Time
You know the normal drill – June 30 comes and goes, you wait for your group certificate then walk down to the accountants office to do your tax return. If your accountant is hands on, they’ll ask if you did this or that – suddenly you remember that article that you read in the paper or online telling you what to do BEFORE the end of financial year – whoops, there go a few more tax dollars.
If you’re in any doubt about what to do with regards to the end of financial year, reach out and do something about it. There are two main professionals that you could see regarding this – accountants and financial planners. So which one should you see? It’s going to depend on what you want to do.
An accountant’s job is to be an expert in tax, business and cash flow ideas. They’re the ones that add up all the details after the fact, so why not ask one before the end of financial year what type of things they will be asking you later.
A financial planner is going to take a different path. If you’re unlucky, they’ll try and sell you a financial product that’s main attribute is giving you a tax deduction but may not actually do anything positive for you because you’ll either have to pay the tax back, or you’ll actually lose money as a result of it. A good financial planner is going to look at all your options on how to save tax, see which one is going to be in line with your long term financial needs and then help you to execute the transaction.
So what types of things is a financial planner going to talk to you about? The list is long, but here are a few tips:
- Make a contribution to your super fund. If you’re employed, you have a very short period of time to make a salary sacrifice – better act fast! If you’re self employed, you’ll be able to make a contribution right up until June 30 for up to the contribution limit which is $25,000.
- Prepay for some expenses. Things like income protection, accounting, some financial planning fees and education expenses which are normally tax deductible can be paid in advance, therefore giving you that little bit of extra money back at tax time.
- Prepay interest on an investment loan. This is not widely practiced but mainly because it’s not as widely known. Interest on an investment loan is tax deductible and you can even pay next years interest now and claim all of it as a deduction. However be warned – if you claim next years interest as a deduction this year then unless you do the same next year you may not get any deductions for that loan next year – which could leave you paying more tax.
As you can see, there are no fixed to do’s that will be applicable to everyone – and this is the reason why you should pick up the phone and call someone to discuss it. If you’re not sure who to talk to, call Financial Spectrum for a quick chat on 02 8238 0888.