Tuesday, 25 June 2013

2013 Tax time reminders

With only 5 days to go until the end of the 2013 financial year I thought I would remind you not to fall into some common traps.  I have posted on these previously but they are good to remember before the end of the financial year.

90millionblog's tips leading into the end of the 2013 financial year

  1. Do not get sucked in by health insurance ads - it's already too late for this year
    • Every single year around tax time the health insurance advertisements remind you that you will get slugged an extra amount at tax time if you earn above the threshold and do not have private health insurance
    • They argue that you can still get cover before June 30
    • This is technically true however the tax penalty is paid for every day you are not covered for the financial year
    • If you didn't have cover you are going to get slugged anyway so take the time to find the right health insurance for you so you don't have to pay this amount next year
  2. Calculate your capital gains for this year and work out if you need to trade
    • In Australia capital gains cannot be offset against losses on your investment property - only against capital losses
    • If you have a realised capital gains in the financial year and losses sitting in your portfolio, for a small transaction cost you can avoid paying actual tax for the year (note that you rebase your capital value if you buy the shares back)
  3. Donate money to charity before the end of the financial year
    • Right before the end of the financial year is the best time to do it because you are doing good work and getting your tax refund on this amount straight away
    • Don't forget to do this you have to get a tax receipt!
  4. You can salary sacrifice into superannuation to save tax
    • Make sure you know what you are doing with this and acknowledge that you will not be able to touch this money until you are in your 60s
    • If you are happy with that you can save a fair bit of tax today (if you do it before the end of the financial year you save the tax this year not next)
  5. If you have an investment property make sure you have a depreciation report
    • Depreciation on property is the 'free kick' when it comes to owning an investment property
    • It is money you effectively get for nothing so make sure you have a depreciation report done
    • If you get it done before the end of the financial year the cost of the report is tax deductible this year
If you have any other last minute tips that people can make use of please list them below.  Do you do anything else right before the end of the financial year?

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