About March through to May every year we recommend that you;

• Identify the likely tax payable as things stand now; and
• Consider how to reduce that tax through simple and effective strategies that you can consider such as:

1. An investing product from Macquarie Bank that might help you reduce your tax and increase your wealth through shares.  It looks quite good at face value although the interest rate is quite high, as is the current share market prices.  Of course, before investing in anything like Macquarie products, you should strongly consider proper advice from our financial planners.
2. Prepaying interest on one or more of your properties.  By doing this, we bring forward deductions into the 2010 financial year that you might otherwise have paid in the following year.  There are two immediate advantages to this in that a dollar saved now is worth more than a future dollar; and, with lower tax rates in 2011 than we have in 2010 the amount of money spent will have more impact this year.
3. Contributing extra funds into superannuation.
4. Undertake a maintenance program on the assets of the business, and, your wealth assets.  By doing this on your properties, for example, you increase the values and can perhaps use this increased value to attract higher rents; and/or higher valuations to enable you to invest in more real estate.  By maintaining the business assets, you will (hopefully) have less downtime in the busier seasons.
5. Consider stocking up on consumables items that you will use within your businesses anyway over the first couple of months of the new financial year.  Common items include stationary, postage stamps, parts etc.
6. Crystallising capital loses (if appropriate) to offset any capital gains already triggered during the year.
7. Review your personal spending over the year to see if there is anything that could be classes as a business cost that you have allocated to drawings or private spending.  There is a list attached that might prove helpful to you with this in mind.  This will not cost you any more to do and may save a little bit of tax.
8. Reviewing the “structure” used to own the assets or businesses that generate the income.
9. Advertising or promoting your business through various means (even having flyers, business cards etc printed) will reduce your profits before the end of the year but perhaps increase your income in the new financial year.
10. Bring expenses forward into the 2010 financial year that you would normally pay early in the next financial year anyway.  Common examples include insurance and replacing low cost assets (items under $1,000 each)
11. Consider donating to charities as a way of contributing to the community whilst saving you a little tax.
12. Maintaining a logbook for the cars not owned by any business for at least 3 months as this might enable you to use one of the other methods of claiming a vehicle and obtain more tax advantage in doing so.
13. Get all of your medical bills sorted to see if you are over the threshold for a tax benefit.  If you have spent over $1,500 on medical costs, or even quite close, then making that trip to the dentist; refilling those prescriptions, or buying those glasses that you have put off til now will improve the quality of your health and save some tax at the same time.

Most importantly though, by communicating with your accountant you have more chance of paying less tax than you would if you leave matters until after the end of the financial year when you do your tax return.

As always, if you would like to know more, please just email Bec