We do not have a crystal ball to allow us to see when we are going to die, however we do know when our tax is due. The end of the financial year is 30 June 2010. Unlike death when sometimes you are not prepared, you can prepare yourself for the tax man.
In the 2006–07 income year, individuals had $18.8 billion refunded or otherwise paid out after they lodged their income tax return, and $13.5 billion was required to be paid by other individuals to meet their annual tax liabilities.
Were you one of those individuals who contributed $13.5 billion to the federal government because you were not prepared? Or were you someone who felt you should have received a better or bigger tax refund?
What can you do?
- Determine now, your anticipated earnings for this financial year – wages, commission, bonus, sale of goods or services.
- Complete an estimate of your tax liability – understand how much you are going to pay.
- Assess your long term goals and determine if you are happy to continue contributing to the Australian Taxation Office or would you be better off contributing to your own long term investments. In other words have the tax man pay off your debts.
- Contact a financial advisor to assist in developing a long term strategy to reduce your tax liability and more importantly to help you create wealth.
- Property investment – tax deductible items include interest on borrowings, council rates, body corporate fees, maintenance, management expenses and depreciation.
- Shares – tax deductible items include interest on borrowings and franking credits
- Managed Funds – tax deductible items include interest on borrowings, deferred income and franking credits.
- Superannuation – salary sacrifice, salary packaging and tax deductions available for self-employed individuals.
