How to start the new tax year right

The new financial year is still quite young, which is the perfect opportunity to get your financial affairs in order. Here are some ideas to help you stay on track.

It’s time for a stocktake

The first thing to do is jot down the balances of your bank accounts, debts, share portfolios and managed investments, and the mileage on your car – it’s all information you’ll need for the next tax year. Take 10 or 20 minutes to record these numbers as this will get you off to a good start and save you a lot of time and headache down the track. Plus, some of that data will be difficult, or even impossible, to find later on.

Form good record-keeping habits

This is the time to form good habits, and proper record-keeping goes to the top of the list. Keep all your relevant documents – for investments, bank accounts, and so on – in one place and make a habit of regularly filing new records there. It’s also a good idea to divide your papers into separate categories to make it easier to locate what you need. You’ll thank yourself come tax time.

Establish your goals – then create an action plan

Now, think about your objectives for this financial year. Are you preparing for retirement? Do you intend to keep on investing? Is contributing more to your super fund something you’ve been meaning to do? Whatever your goal, this is the time to forward plan. Think about what it is you’re hoping to achieve, then put together a course of action to help you get there.

Seek the help of experts

If you’re not confident about managing your financial affairs, then the help of experts may be for you. In particular, advisers, accountants and tax agents can provide you with tailored professional advice, put together a structured plan that is suited to your individual circumstances and help manage your investments and taxes. It’s best to do things properly from the beginning and avoid making mistakes.

Review existing investments

Assess your investments – should you hold onto them or take profit? If they’re not achieving your growth objectives, or are unlikely to do so, it might be better to cut your losses. Also consider tax-effectiveness strategies, such as gearing (where the interest on the loan is tax deductible) and if you have a spouse, remember you can reduce capital gains tax on any profits if you list the assets under the name of the partner on the lower tax bracket.

Contribute more to superannuation

Putting more money into super via salary sacrificing has two benefits: increasing the size of your retirement nest egg, plus lowering your marginal tax rate. But remember there are strict contribution caps. Visit the ATO website (www.ato.gov.au) for information before you make any arrangements.

Donate regularly

While many people often make a one-off charitable donation towards the end of the financial year for the purposes of a tax deduction, consider giving more regularly. Many charities have automatic debit facilities in place to make monthly donations easy, and a regular deduction can help you budget.