The Australian Financial Year end on 30th June, so it's time to start working on this year's tax return and to get organised for next financial year. My tax affairs are reasonably simple - I have some investments and a "business" that is run as a sole trader, so it just forms part of my personal tax return. I've always done my own taxes, so I've learned the relevant tax return requirements for my investments over the years as I started investing in each new asset class and investment vehicle. In this series of posts I'll go through the various parts of my tax return and how they relate to my investment strategy.
Even though I use eTax to submit my tax return, I still work through the "Tax Pack" as it helps get my documentation organised and I can scribble notations about any unusual aspects of the item calculations. I usually organise my paperwork and receipts in the same groups I used last year, and it's easy to work through the current Tax Pack using last years as a guide to what information goes in which section.
The tax return starts out with personal details. The information for this section is generally the same as last year, unless I've moved house. There's always a question about whether this will be my last tax return - I expect the answer to this will always be "no".
The first question in the income section is about salary income and PAYG tax paid. By the time you get around to filling this in it's way too late to do anything about this. I previously reduced this a bit by arranging for salary sacrifice of $450 a fortnight - whereby my employer reduced my salary by the requested amount and makes a corresponding increase in the amount of employer superannuation contribution paid into my retirement account. The means that this part of my salary won't be taxed at my marginal tax rate, but will be taxed at the 15% superannuation pre-tax contribution rate. When making these arrangements for the first time it's a good idea to double check that you're employer won't reduce the compulsory 9% SGL amount. For next FY I've requested the salary sacrifice increase to $1600 per fortnight. The only reason I can afford to do this is that I withdrew $34,000 of non-preserved, undeducted contributions from my superannuation fund.
Next post I'll go through interest and dividend income items.
Enough Wealth
No comments:
Post a Comment