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Author: Jye Smith

Some top tips for investors at Tax-Time

Tax time can be confusing and stressful, but adding investments to the mix can be enough to make anyone sweat. This year at tax time, we've made things a little easier for you. If you’re an investor, let Newcastle Branch Manager Jye Smith help you develop a plan to navigate your way safely through your return.

The reason for investing is to sure-up your financial future, right?  But, without the right advice your investments can end up costing you at tax time.

The Bridges Tax tips and tax return checklist provides tips and explains the tax-effectiveness of superannuation, here are a few more simple tips to help you make it through tax time:

  1. Paper trail – Make sure you hang onto summaries of all your expenses and income. If you have an investment property, you may find it more convenient to use a property management agent, who can provide you monthly and yearly statements. Also, make sure you keep all your bank statements showing your interest expense.
  2. Getting your expenses right – when it comes to deductible expenses, only those incurred through investing are deductible because it’s the loan purpose that determines whether or not an item is deductible, not the security. Don’t forget, if you’re capitalising interest, the ATO may ask for evidence of correct documentation and intention.
  3. Capital gains –Throughout the year, if you have any capital gains, you can offset these against any capital or trading losses made in the same year.  If some of your assets have lost value, you may want to think about selling them to reduce the capital gain.  However, before you consider selling, keep in mind that, for any assets you’ve held for more than 12 months, the capital gain is discounted by a considerable 50 per cent.
  4. Capital losses – Capital losses can only offset capital gains. So, if you've made a capital gain this year, review your portfolio and see whether it’s worth realising a capital loss in order to offset the gain. If, on the other hand, you have insufficient gains to absorb your capital losses, remember that you can carry forward your capital losses for an infinite period.

If tax time is the time of year when you review your portfolio, why not take the time to meet with a financial planner? The Greater has partnered with Bridges to provide professional advice to investors. The initial appointment with a Bridges financial planner is complimentary and obligation-free.

If you’ve got an investing tip for tax time, please leave it in our comments section below.

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Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL No 240837.This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this article you should assess your own circumstances or consult a financial planner.

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