Things you can do to minimise tax in 2011/2012

At First Class Accounts, our slogan is ‘more than just bookkeepers‘ and our aim is to assist our clients by adding value above expectation. This is one of the many things that seperates us from our competitors.

As a network, we partner with a number of service providers in order to maximise the benefits to our clients. One such partner is Ballast who have kindly provided us with some helpful tips to minimise tax in 2011/2012.

Superannuation – To take advantage of any superannuation concessions your contribution must have been received by your superannuation fund before 30th June, 2012.

If you do not have employer support and you are under 65 years of age you can make a tax deductible superannuation contribution for yourself up to the age base limit of $25,000. If you are under 50, and $50,000 for 50 and over. Remember too, you could also benefit from the Government’s co-contribution scheme

Cars – You can use the kilometre rate if you only want to claim 5,000km per car you own. The 5,000km is per car per owner so if you rotate cars with your spouse and you both use your car for work purposes you can claim up to 10,000km each. The 2011/12 kilometre rates are: up to 1.6 litres – 63cents/km; between 1.601 and 2.6 litres – 74cents/km; and over 2.6 litres – 75 cents.

Payments In Advance – Making payments in advance will move deductions from next year into this year, if you are an investor, wage earner or small business (turnover less than $2m). Expenses a business could consider are rent, lease payments, advertising etc. Investors and businesses paying interest in advance must make sure it treated as such by the bank.

Protective Items – Wage earners may consider buying, before June 30, items they will need for work in the following year. For example, protective items such as sunscreen and protective clothing. Basically you can claim for a protective item if, by its nature, it would be reasonable to conclude that it will protect you from the risk of injury or illness in your workplace and that risk is not remote or negligible.

Capital Gains – If you have a capital gain analyse your share portfolio or any other assets for a capital loss that you intend to realise soon. Make sure it’s realised before June 30 as it can only be offset against your capital gain if it is realised in this year. Delay selling your investment assets if possible, until you have held them for more than 12 months in order to gain the 50% tax free discount on the capital gain

Large businesses

Large businesses (turnovers of more than $2 million) can only prepay expenses less than $1,000 (net of GST if registered), wages, and payments required by law to be paid in advance e.g. vehicle registration.

These are 5 ways you can minimise your tax in 2011/2012.

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