Financially prepare early for next year

WITH the end of the financial year fast approaching, you'd probably think it's too soon to start worrying about the next end of financial year.

You'd be wrong.

Frank Shepherd, a partner at Shepherd and Dudley Chartered Accountants, said people should already be thinking about adding extra contributions to their superannuation.

He said salary sacrificing was the best way to go about super contributions but residents should try to avoid contributing, along with their employer's contributions, more than $25,000.

"If you exceed that, there's effectively a penalty rate of tax," he said.

From July 1 this figure will increase to $35,000 for those over 59 years of age.

For those who earn less than $31,920, it's not too late to take advantage of a $500 government contribution to your super, if you contribute $1000 before June 30.

Mr Shepherd said rules regarding taxation were constantly changing, with recent changes made to the Health Fund Rebate.

The government will now determine your rebate based on your income.

"If someone has a family and earns $168,000 (combined income) or less ... the rebate will be unchanged," he said.

"If, however, your income went up to $194,000-$260,000 and you're under 65 years of age then your rebate will drop from 30% down to 10%," he said.

To avoid a Medicare levy surcharge, those earning more than $84,000 should also consider getting private health insurance - even just minimum coverage - rather than being hit with a 1% levy.

Mr Shepherd said while the old joke of keeping your receipts in a shoe box was funny - he thought it was a good idea.

"You're better off throwing it in a shoe box, bringing it in, talking to the agent and saying can I claim these things," he said.

"Without the docket it's very difficult to claim."

He said "pub talk" was a big issue for accountants, with people thinking they could claim things because their mates had.

"The bottom line is when you get down to it you'll find there's been exceptional circumstances for those people or they've misunderstood what they've been claiming."

 

TAX TIPS

  •  Costs incurred doing your tax is deductible - including travel to the agent and stationary
  •  Mackay residents are entitled to $57 basic zone rebate
  •  Start thinking about next year now
  •  When in doubt speak to an expert
  •  Keep all your receipts
  •  Write down questions before seeing your accountant
  •  Be honest - ignorance is no excuse


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