March 2022

Autumn is the colour season in Orange, to add some of our own Accounting colour, we thought we’d bring you some Thrive’s Hot Autumn tips, whilst the weather cools down.

All things super

New limits for super mean you can boost your retirement savings and gain an attractive tax break. From 1 July 2021 the new limit is $27,500 (up from $25,000). Why not contribute a bit extra into your super on a before-tax basis, and potentially reducing your tax at the same time.

If you have any unused caps from above in prior financial years and your super balance is below $500,000, you may be able to ‘carry forward’ these amounts to further top up.

Also, don’t forget you can make personal contributions to super that count toward the $27,500 cap, and claim a tax deduction, you just need to write to your fund to let them know.

More super things about super

Talk with your accountant\adviser about salary sacrifice, it’s not too late in the financial year to make a difference to your tax result with this strategy.

The downsizer contribution is still an option if you are over 65 and plan to sell your home you can contribute up to $300,000 from the proceeds of the sale without meeting the work test.

Know your tax deductions

Make sure you keep track of your work from home hours due to COVID-19. You can claim up to 80 cents per hour worked for your running expenses. Also, check your records for other deductions like tools, equipment, car use, travel, clothing, self-education, donations etc.

If you haven’t considered income protection then you should, your ability to earn an income is very important and worth insuring, and besides that it’s tax deductible.

Temporary full expensing for business taxpayers means a 100% deduction is available to businesses that purchase an asset in the year it is first used. Normally these would need to be depreciated over a number of years. This is still available in the 2021-22 income year.

When the market jitters…

When the market jitters you shouldn’t hit the panic button, staying the course is generally the best course, but that is easier said than done. The markets dropped 10% in January then staged a recovery. We may see this a little during the course of 2022, make sure your talk with your adviser when you feel panic setting in. The cause of the jitters is likely to be fear of inflation, prospect of rising interest rates, and the Russia – Ukraine conflict.

Interest rate rises have been conceded by the Reserve Bank and may start to rise during 2022, with many analysts looking at August. Our inflation is more in check than the United States inflation rates, so we possibly will see rates go up only 1.5 to 2 per cent according to analysts. It won’t take much to slow the inflation down based on household debt to income ratios. This means keeping an eye on this would be wise for mortgage holders, as an opportunity to fix some or all of your debt during 2022 may arise.

A chance to review…

A chance to review your investments when there is a downturn in the markets can create an opportunity to ensure it truly reflects your risk profile. What happens is after years of strong market returns your investments may have become out of balance with what your portfolio mix should be, and there may be opportunity to rebalance during 2022.

Have a good laugh

Laughter is the best medicine according to science, due to laughter stimulating the production of endorphins and oxytocins and also reduces your body’s production of stress hormones. So our best tip, is the last tip, laugh, smile and have fun.

If you would like to discuss EOFY strategies, super, investment strategies, risk profile, the jitters, or Autumn colours, please call our office on 02 6362 8255.

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