Good tax planning before year-end can mean significant tax savings – but leaving it until the last minute or, worse still, not giving it any thought, can be very costly. The following tax tips are particularly critical for the self-employed to consider prior to 30 June 2014.
Maximise Deductible Superannuation Contributions Where Appropriate
Did you know that self-employed Australians have the lowest average account balances? If you are a self-employed person, you may consider providing for your retirement by making annual superannuation contributions. This is not an easy task when a business is growing and requiring ongoing capital investment. The tax benefits of superannuation should be considered and, depending on your age, you can contribute in 2013/14 year a maximum of $25,000 or $35,000 if you are 60 or over. It is critical that these contributions are received by your superannuation fund at least a week prior to 30 June to allow for any processing delays, otherwise you may find that your last minute contributions are not able to be counted in this year’s tax deduction. If you are an employee you may consider salary sacrificing additional amounts into superannuation. However, you must ensure you do not exceed the superannuation contributions caps each year as the tax cost can be significant.