The Finance Guru June 30 Tips Part 2
TIP 4 – GET THE SUPER CO-CONTRIBUTION
This year is your last chance to get up to $1000 of free money from the government if you make a non-deductible super contribution and claim the government co-contribution. Next year, the maximum co-contribution is being halved to $500. Many middle-income earners will also miss out on the benefit next year.
At the moment, you can claim the full $1000 co-contribution if you earn up to $31,920 and a partial co-contribution if you earn up to $61,920.
But next year that upper-income limit will fall to about $46,920.
TIP 5 – MAXIMISE CARBON TAX COMPENSATION
I think retirees should do some tax planning to try to qualify for the carbon-tax compensation.
Compensation will be paid to self-funded retirees who are eligible for the Commonwealth Seniors Health Card. Singles earning up to $50,000 and couples earning up to $80,000 are eligible.
The card has plenty of benefits in its own right but there’s now even more incentive to make sure you qualify. Simple strategies such as maximising tax deductions may get you over the line if you’re close to the limits.
TIP 6 – PRE-PAY EXPENSES
The tide has changed on end-of-year gearing strategies which no longer popular, if you have a geared investment it is worth considering pre-paying next year’s interest to gain an immediate tax deduction – especially if you’re paying the flood levy this year.
You can also get a deduction now by pre-paying next year’s income protection insurance premiums. ‘Many people don’t even realise income-protection insurance is deductible.
TIP 7 – MANAGE CAPITAL GAINS
If you’ve made a capital gain this year, review your portfolio to see whether it is worth realising a capital loss to offset the gain.
You can’t carry losses back. So if you’ve made a capital gain, you may want to trigger a loss to offset it against.
However, you can’t just sell an asset to trigger a loss, then buy it back. The Tax Office regards this as a form of tax avoidance – known as a wash sale – and has been focusing on picking such sales up in recent years.