With only two weeks to go until the end of the financial year, you may be more focused on what can be done with your finances in the next 12 months rather than the next 12 days. But People’s Choice Senior Financial Planner Sally Kolbig says even that short period can be used to kick-start a healthier and wealthier outcome.
1. The Government – it’s here to help
“Part-time or casual workers can look to the Federal Government to help build their wealth,” Ms Kolbig said.
“If you earned less than $37,697 during the past financial year and make a $1,000 contribution into your superannuation fund, the Government will add another $500 to your super. In fact, you can earn up to $52,697 and still receive some money from the Government to lay the groundwork for a stronger investment."
“If you have the discipline to save that money and are looking for a longer-term investment, it could be a smart way of making your savings work even harder for you.”
2. Reap the rewards for not being greedy
“If the total amount of compulsory employer superannuation contributions and any salary sacrifices to your superannuation fund are less than $25,000 for the year, you may be able to add a little extra and cut your tax,” Ms Kolbig said.
“This amount is known as the concessional or pre-tax contribution cap. If it is less than $25,000, you may be able to add extra to your fund in the next couple of weeks and claim a tax deduction in your personal tax return for the amount of the deposit."
“Yes, you are reducing the cash you have available, but the amount you deposit is taxed at the concessional rate of 15% rather than your marginal tax rate, which tops out at 45%. It can be an efficient strategy that may appeal to you if you are trying to maximise your retirement savings while also cutting your tax.”
3. It must be love
“If your spouse’s total income is less than $37,000, you can make a $3,000 contribution to their superannuation account and receive a $540 in tax offset,” Ms Kolbig said. “It’s a simple action than can make a difference in the final two weeks of the financial year.”
4. Swings and roundabouts
“Sadly, investments such as shares rarely offer a guaranteed profit. The reality is, in your investing life you may face some investments that present you with a loss,” Ms Kolbig said.
“Sometimes it may be better to accept the loss, and now is the time to make that decision. If you sell any loss-incurring assets such as shares in the coming weeks, you can offset those losses against your tax liability for gains on other assets you may have sold."
“It may not bring a smile to your face, but it can make tax time a bit more palatable.”
5. Reap rewards from planning ahead
“If you have income protection insurance, consider paying next year’s premium before 30 June. You may get a kick out of ticking it off your to-do list, but you also get to claim the tax deduction on this year’s return,” Ms Kolbig said. “It’s a simple strategy that can yield some quick results.”
Ms Kolbig said short-term gains in the final days of the financial year are always helpful, but the best results come from a longer-term approach, developed with expert insight.
“If you value the goal of building your wealth, taking action in the two weeks before 30 June isn’t going to lead to an early retirement. But speaking with a financial planner about your goals and risk appetite and laying down a multi-year strategy can make a difference that will make your life easier in the long term,” she said.
“Either way, make sure you get your tax return in on time. The easiest way to save $1,000 is not to incur a penalty for non-lodgement.”