Tax Tips
July 2007

The end of the financial year and accompanying tax time generally sees a review of the past twelve months. However, it is also a great opportunity to plan for the coming year to identify strategies that can help you to minimise your tax liability.

Salary Sacrificing
Salary sacrificing is an effective method of reducing your tax. Simply put, it is an agreement between employer and employee whereby the employee forgoes part of their wages or salary in return for benefits of a similar cost to make up the remuneration package as a whole. Prudent considerations include putting the agreement in place prior to work being performed, documenting an agreement, and being aware of the benefits received.
It is also advisable to seek financial advice prior to accepting a salary sacrificing package to ensure you are aware of any associated costs and surcharges or obligations that may arise.
However, an effective package should mean you pay tax on a lower income level whilst still receiving the benefits of a higher package value.

Paperwork
Whether you have multiple investments or none, keeping your paperwork in order is sensible a practise. Although there is allowance for claims to a certain dollar amount without having to provide the accompanying paperwork, should the ATO require this information you must be able to provide it. Any items you wish to claim as tax deductible must have accompanying receipts, so keep them in a safe place throughout the year.
Tax rebates and work-related expenses can reduce your year-end bill so it's a good idea to know what claims you may be entitled to and therefore what paperwork to hold on to.

Investments
When considering investments, it's a good idea to receive independent advice to ensure the tax implications of your investment have been factored in. Although a good advisor will develop a strategy with this in mind, be wary and ensure the strategy meets your needs.
In calculating your dividends and interest, your paperwork is not only helpful for tax returns but also for keeping an eye on your investment's performance. The Tax Office will cross-check the claims on your return with information from other sources, so have all your paperwork available for your accountant to ensure your return is correct.

Advice
Remember that tax is a tricky area and many accountants spend a large proportion of their time keeping up to date with legislation and understanding how the tax system works. As fees paid to your tax agent for return preparations, amendments and general tax matters are tax deductible, spending the money to receive professional advice on tax and tax planning is well worth it. Contact us to see how we can help you.