2006/07 Financial Year Tax Tips
2006/07 Financial Year Tax Tips
The following tax tips are only guidelines. Here are some main points you need to consider, while not exhaustive, when you are preparing your income tax returns for the 2006/07 financial year:
For Individual Taxpayers
Keep written evidence to claim deductions exceeding $300.
Car deductions - There are 4 methods in claiming car expenses. You need to make sure which method will give you maximum deduction.
Superannuation contributions – The government will match the eligible personal contributions. There is couple of options available e.g. Super Co-contribution and superannuation contributions on behalf of your spouse.
Consider making salary sacrificing contribution into super – can be highly tax-effective as the contributions are paid from your pre-tax dollars.
Declare interest and dividend income – a lot of taxpayers get caught by not declaring the income. ATO can match the income with tax file number.
For Business Taxpayers
Dividends and bonuses – pay any contemplated amounts prior to year end.
Superannuation – Make sure all superannuation contributions are paid before June 30. Otherwise you will not be able to claim deduction in the financial year.
Defer income – put off receiving income until after 30 June. That way you can delay paying tax for another year.
Bring forward deductions – pay for any necessary work expense now, rather than putting it off.
Use tax-effective strategy using deductible superannuation contribution to max - increase net wealth position by reducing marginal tax rate of taxpayer.
Stocktake – You will pay less tax if you have lower closing stock at end of year. Scrap any unsaleable stocks.
Depreciation expense – review asset lists and scrap any obsolete and retired items.
Bad debts – consider writing off any bad debts prior to year end.
Use FBT and salary packaging – This could lead into tax savings for both employer and employee.
For Investors & DIY Superannuation holders
Capital gains/losses – review the asset portfolio and consider realising any capital losses prior to year end to offset if you have capital gains.
Minimise Capital Gains Tax - eligible for 50% CGT exemption if asset is held for more than 12 months.
Split assets and income – place income and assets in the name of spouse with a lower marginal tax rate. But you must consider the costs of transferring existing assets – such as stamp duty and capital gains tax.
DIY Super Audit – make sure you super fund is complying. Any significant breach can result in loss of tax concession. The assets and income of the fund will be taxed at 47%.
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