Tax Time - Take Control

Here we are again roaring towards another new financial year. If you haven't already considered tax planning, now is the time.

There are many smart ways to reduce your tax liability, however, here are a couple of simple things to do last minute.

1. Prepayments

A couple of goodies are prepaying interest on investment loans or the annual premium on an income protection insurance policy.
However, it is important to be aware of the 12 month rule, which will be satisified if

• you incur an eligible prepaid expense for something to be done over a service period of 12 months or less, and
• the service period ends in the income year following the year you incur the expense.

2. Super Contributions
Another good deduction is contributing to super; for those on a lower taxable income contributing to super may also include the benefit of the government co-contribution.
Government Co-Contribution
If your taxable income is below $31,920 the government will match $1 for $1 contributions up to a maximum co-contribution of $1,000.
If your taxable income is above $31,920 but below $61,920 your entitlement will be reduced 3.333 cents for every dollar of your taxable income over $31,920

Any contribution to super shouldn't be left to the last minute; many retail/wholesale funds close off on around the 27th June.