There is still some time for you to discuss end of financial year strategies with your financial adviser. Aviva’s Martin Breckon, technical marketing manager says that with 30 June 2009 fast approaching, people should be talking to their financial adviser about their end of financial year strategies.
There is still some time for you to discuss end of financial year strategies with your financial adviser. Aviva’s Martin Breckon, technical marketing manager says that with 30 June 2009 fast approaching, people should be talking to their financial adviser about their end of financial year strategies which can include:
Boost your long term savings with your superannuation
Did you know that you can maximise your contributions up to the superannuation contribution caps? Superannuation is still one of the most tax effective investment environments available. For those wishing to increase superannuation contributions for the 2008/09 financial year they must do so prior to close of business on Tuesday 30 June 2009.
Tax deductible superannuation contribution
You may benefit from claiming a tax deduction on personal superannuation contributions if your marginal tax rate exceeds 15%. In order to qualify, you must be under age 75, be eligible to make personal superannuation contributions and have less than 10% of your assessable income plus reportable fringe benefits derived from employment. As they are treated as concessional contributions, it is important that you do not exceed the concessional contribution cap.
Boost and contribute towards your spouse’s super and save
Did you know that you can be eligible for a tax rebate of up to A$540 for contributions you make on behalf of your spouse? This tax offset applies to contributions made on behalf of non-working or low income-earning spouses, whether married or de facto. In order to qualify for a tax offset, your spouse must have less than A$13,800 in assessable income plus reportable fringe benefits. The tax offset is effectively an 18% rebate on the first A$3,000 in spouse contributions made.
Take advantage of the government’s co-contribution scheme
If you earn less than A$60,342 you may be eligible to receive the government’s co-contribution. For every dollar you make as a personal contribution into your superannuation, you will be eligible to receive a co-contribution from the government of up to A$1.50. The maximum co-contribution is up to A$1,500. It is important to take advantage of this benefit before 30 June as the value of the co‑contribution reduces from A$1.50 to A$1 for every personal contribution dollar in the next financial year. In order to qualify for the co-contribution, clients will need to be under the age of 71 at the end of the financial year and have derived an income of at least 10% of assessable income plus reportable fringe benefits from an employer and / or business-related activity.
Re-contribution strategy
This is a popular pre-retirement strategy which involves the withdrawal of a portion of your superannuation as a lump sum, then re-contributing the balance back into your superannuation fund. The reason for undertaking this strategy is to boost the tax-free component of your superannuation fund if lump sum or pension benefits are to be received prior to the age of 60. Additionally, if benefits are likely to flow through to an estate, a re-contribution strategy may also be advantageous.
Pre-pay your interest
Have you borrowed money to make an investment that will generate an assessable income? If so, you may be entitled to a tax deduction on the interest paid on your loan. By prepaying interest now, you can make the tax deduction for this financial year (interest can be prepaid for up to 12 months in advance).
Mr Breckon further added: "With June 30 fast approaching, it’s important that you go and see your financial adviser quickly to discuss how you can make the most of end of financial year strategies available to you. There are many ways in which you can help boost your superannuation or save yourself some tax. A financial adviser can provide you with professional advice to help you meet your long term goals."
-ends–
For more information:
Ariana Alvarenga
Assistant Manager - Public Relations
Phone: (03) 9829 8985
Mobile: 0409 187 487
Sue Voglis
Research & Public Relations Manager
Phone: (03) 9829 8057
Mobile: 0408 309 247
Disclaimer
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