The current financial year is almost at an end, and with an election to be held two days later the recently announced federal budget measures will of course have no chance to take effect until some time into the next financial year, if at all.
But in the meantime there are still many strategies you may be able to put into play to ensure you
Not all of the following tips will suit your circumstances, but as a list of possibilities they may get you thinking along the right track, and have you asking us the right questions. Of course check with this office if you need further information.
Most taxpayers can claim a deduction for up to 12 months ahead. But make sure you review how you and your lender have allocated funds secured against your property correctly, as a tax deduction is generally only allowed against the finance costs incurred for the purpose of earning assessable income from investments.
A deduction may not be available on funds you redraw from this loan put to other purposes.
If you know that next fiscal year you will be earning less (such as going on maternity leave, going part-time etc.), deductible expenses that can be brought forward into the present financial year will provide more financial benefit.
An exception for some lucky individuals will arise if you expect to earn more next financial year. In that case it may be to your advantage to delay any tax-deductible payments until next financial year, when the financial benefit of deductions could be greater. Your personal circumstances will dictate whether these measures are appropriate and we can assist with this.
A similar approach could also be adopted if you have carry forward capital losses and wish to realise some gains at year end.
Keep in mind that for CGT purposes a capital gain generally occurs on the date you sign a contract, not when you settle on a property purchased. When you are making a large capital gain toward the end of an income year, such as selling an investment property, knowing which financial year the gain will be attributed to is a great tax planning advantage.
Of course, with all of the above, tread carefully and don't let mere tax drive your investment decisions – check with this office to determine whether your approach will suit your circumstances.
Every individual taxpayer is required to lodge their return before October 31, but tax agents are generally given more time to lodge, which can be a handy extension to a payment deadline. Of course, if you're sure you are going to get a refund it's no use delaying, so in these cases it is worth getting all of your information to this office as soon as you can after July 1.