The end of the financial year is almost upon us and there are a number of tax planning strategies and considerations that may be of benefit to you.
Please find a few tax tips below, however, please remember that your individual circumstances must be considered and we would advise that you speak with our professional advisors for more information. The information below is of a general comment and is not intended to be advice.
Pre-Pay Private Health Insurance
The private health insurance rebate will be reduced or eliminated for higher income earners from 1 July 2012. The rebate reductions will only apply to premiums paid after this date.
The full rebate will only apply for singles earning up to $84,000 and couples earning up to $168,000. A reduced rebate will apply for those earning between these amounts and $130,000 for singles and $260,000 for couples, and higher earners will miss out altogether.
You may want to consider prepaying next year's premium or future years before June 30 to obtain the full benefit of the private health insurance rebate if you believe you will be ineligible in future years. For a family with one child paying just over $200 per month, pre-paying could save from a few hundred dollars to over a thousand dollars depending upon the income bracket they fall into.
Maximise Concessional Super Contributions
If you are over 50 years of age as at 30 June 2012 you may want to consider a concessional superannuation contribution of up to $50,000 before 1 July 2012. The $50,000 concessional contribution cap will not apply for the next 2 financial years.
For more super planning considerations speak with our Wealth Management team at Leenane Templeton Wealth Management.
Instant Asset Write Off For Small Business
A small business may consider deferring the acquisition of income producing assets with a value of less than $6,500 and motor vehicles of any value until after 30 June 2012 to obtain an immediate depreciation write-off.
Medical Expenses Tax Offset
There will be a means test for the medical expenses tax offset from 1 July 2012 for individuals with an adjusted taxable income above the Medicare levy surcharge threshold of $84,000 for singles and $168,000 for couples and families. This is the same income levels where you are hit with the Medicare levy surcharge if you don't have private health insurance.
The net medical-expenses rebate currently allows you to claim a 20 per cent tax offset on out-of -pocket medical expenses for you and your family above $2000. The offset next year for those taxpayers will only be available for out-of-pocket expenses in excess of $5,000 and it will be reduced from 20 per cent to 10 per cent.
It may be worth considering bringing forward any medical expenses before June 30, getting that dental work done or even stocking up on specific pharmaceuticals you are prescribed; to ensure your medical expenses rebate claim is maximised.
Change Your Salary Packaging
If you are currently aged over 50 and your employer is making concessional contributions in excess of $25,000 for you currently, you will need to make changes to your salary arrangement.
For your next pay after 1 July 2012 you need to tell your employer to reduce your contributions otherwise you will be liable to excess contributions tax (tax at 45 per cent on the excess contributions).
For End of Financial Year Tax advice speak with the Newcastle Tax Professionals at Leenane Templeton