As they say, planning and good advice is everything.

Here are some snippets that could relate to you:

 Defer Income: 

• The 30% tax threshold will kick in $2,000 higher at $37,000 and the 38% rate (formerly 40%) falls to 37%. 
• SME’s / contractors could bill (defer) on July 1 to get lower tax advantage. 

Deductions: 

• Bring forward expenses into this financial year. 
• Prepay margin loan interest, income protection insurance etc. 

Salary Packaging (FBT): 

• Lower tax rates may undermine benefits. 
• Reconsider whether you switch to employee contribution method if you’re in a lower tax bracket, ie pay some running costs such as petrol yourself and offset FBT. 

Home Office: 

• Allocate a separate area at home, as distinct from sitting at the kitchen table, which nobody else uses when you’re working. 
• Start a diary for a couple of weeks recording how long you work at home to show what percentage of your time is taken up.  You can then use this to claim a raft of expenses on a pro rata basis, eg power, heating, telephone, computer etc. 

Superannuation: 

• Avoid excess concessional contributions – particularly for those who have been salary sacrificing salary to super. 
• Consider co-contribution eligibility. 

Income Splitting: 

• To reduce tax, assets need to be in the name of a family member paying the lowest tax. 
• Switch at call deposits and other investments to the lowest income earner / tax rate. 

Capital Gains: 

• After last year’s losses, some investments such as property and shares will be carrying a capital loss. 
• Consider re-balancing your portfolio by selling an investment with a loss and offsetting against an investment that has an embedded capital gain. 

Health Insurance: 

• Many taxpayers could be caught by the 1% medicare surcharge on top of the 1.5% Medicare Levy because of this year’s changes to the treatment of salary sacrificing into superannuation.  Contributions this year will be added back. 
• Check your thresholds. 

Small Business: 

• Use your 31st March 2010 BAS to review where you are at. 
• Review the above plus loans, PAYG variations, asset position options etc.

 These tips are just the tip of the ‘iceberg’. 

WHAT SHOULD YOU DO? 

Ring and make an appointment now (must be well before 30th June) so that we can complete your tax health check and ensure you have left no stone unturned to ensure you have minimized your tax obligations. 

Don Blackwell –  Director,  Advantage One