For many of us, the period just before the end of the financial year can be an important time to look at finances. Taking stock at this time is a great way to check-in on your situation and see if any changes are needed in the lead up to 30 June.
For example, it may be a good idea to review your existing (and expected) concessional contributions to superannuation for the 2021-22 financial year—to see if you are making the most of the annual concessional contributions cap limit.
Below we’ve included a list of some key EOFY considerations to bear in mind. While these strategies may help reduce your personal income tax and/or provide for your retirement, their suitability will depend on your own eligibility and circumstances. As always, it’s important to seek qualified professional advice before making any changes to your finances.
Capital gains and losses
1. Depending on your circumstances, looking at your capital gains and losses could help reduce your personal income tax, for example:
Please note: While the above considerations take a tax-planning perspective, decisions of this nature should also be consistent with your overall investment strategy.
Deductible interest and expenses
2. Depending on your circumstances, increasing your deductible interest and expenses could help you reduce your income tax, for example:
Please note: The above could also be relevant when, for example, you expect your income will be lower in future financial years when compared to this financial year.
Private health insurance
3. Depending on your circumstances, look at your private health insurance status, for example:
4. Depending on your circumstances, look at your superannuation and consider, for example:
Please note: The above could also be relevant when using the First Home Super Saver Scheme.
5. Depending on your circumstances, look at your spouse’s superannuation and consider, for example:
Please note: The above could also help you fully utilise your combined transfer balance cap limits.
Just before the end of the financial year can be an opportune time to review your finances and plan for the year ahead—and by doing so, you’ll see if any further actions are required prior to 30 June.
Importantly, while the above list of EOFY considerations could be helpful with respect to several areas of your finances, please consider seeking qualified professional advice for a proper assessment of their suitability.
If you have any questions regarding this article, please contact us.