With just over a month to go before the financial year ends here are a few tips for strategic planning:
1. Super contributions caps – make sure you know how you are travelling against your relevant contribution caps this year in order to optimise your tax effective contributions for the year. This includes looking to maximise both deductible (pre-tax) and any low income co-contribution entitlements as appropriate. For some, it means stopping last minute additional contributions that could breach the caps.
2. Pre-retirement funding – if you are planning a large after-tax contribution soon to top-up your super fund, look to split only $150,000 before 30 June to pick up the new higher 3-year bring forward limit on 1 July of $540,000 (if still under age 65 then).
3. Pension payments – if you are taking pension payments from super, check to make sure you will have drawn at least your annual minimum income payment for the year by 30 June. Failure to do so means losing tax-exempt status.
4. Taxable entities & CGT – check your unrealised capital gains/loss position for the year to see whether there are any unrealised losses that should be crystallised (i.e. assets sold) to offset gains that have arisen during the year. This can be relevant for all investment portfolios including SMSFs
5. Income/Expense planning – if your taxable income is likely to drop from 1 July (e.g. retirement, part-time work, maternity leave, etc.) ensure allowable expenses are paid this year and defer receipt of taxable income to 1 July (e.g. leaving work benefits) to maximise your current tax position.