The secrets behind boosting your tax return
WITH only a handful of days left until June 30, St George Bank is offering tips for seniors to get your finances in order to save money and help boost your tax return.
St George reports its research shows only one in two Australians over 50 divert their savings into superannuation, instead choosing to place their cash into at-call high interest savings accounts.
Fifty-two per cent of respondents said they use high interest accounts and nearly 27% opt for term deposits. A third said they were also directing their savings into paying off their mortgage and debts.
St George retail banking general manager Ross Miller urges seniors to consider where at-call cash is best placed and the range of options available leading up to tax time, particularly with the upcoming changing superannuation rules.
The bank's research findings also showed Australians over 50 want to benefit in retirement by choosing part-time work, having the time and ability to care for their loved ones, and using their savings to enjoy travel and family holidays.
"Tax savings can help this age group achieve these priorities, but the fact that only 26% of respondents had reviewed their financial plan signals that many are under prepared for tax time," Mr Miller said.
"However, it's not too late to start planning and with some good advice and simple steps, that holiday with your family might be one step closer than you think.
"And if you do owe tax, putting in some simple steps now could change all that for the next financial year."
St.George Bank's top seven EOFY tips for Seniors are:
1. Pre-pay your deductible expenses: this includes insurance premiums, investment loan interest payments (ie margin loans) and the cost of maintenance and repairs to investment properties. That way, you can claim the deduction this year.
2. Get your paperwork in order: receipts for work-related expenses such as uniforms, training courses and learning materials. If you work from home this can include claiming a computer, phone or other electronic device as a work-related expense.
3. Top up your before tax super contributions: you might be able to contribute before tax contributions up to $10,000 more this financial year compared to future financial years (after July 1, 2017), when the before tax contribution cap for those aged 50-64 reduces from $35,000 to $25,000.
4. Consider the 'bring forward super rule': Those under 65 in 2016/17 who have not contributed after tax contributions of more than $180,000 per year in the last two financial years may contribute up to $540,000 (3 years x $180,000 a year) this financial year (before July 1, 2017).
5. Contribute for your spouse: you may be able to claim an 18% tax offset on super contributions of up to $3,000 made on behalf of your non-working or low-income-earning spouse. You can also split your employer super contributions with your spouse.
6. Check the limits on your retirement income streams: will the balance at the end of June exceed the new $1.6 million pension cap? If so, plan your next steps for reducing the balance before 30 June. Be aware of the new 15% earnings tax on Transition To Retirement pensions and plan where these funds are best placed.
7. Do a super search: finally, you just never know with over $16.2 million in lost super, some of it can be yours.
For more information about planning for over 50s, go to www.stgeorge.com.au/personal/life-moments/approaching-retirement.