1) Borrow to invest
Usually this means buying an investment property, but if you don't want to spend $500 000, you can borrow $10 000 to buy a few shares and get similar tax deductions; you can also insure the shares to guarantee that you cannot lose money if they go down. Would you buy shares if they were guaranteed to win? The “insurance on your shares” may also be a tax-deductible expense.
2) Pre-pay investment expenses
For example, paying the interest on your share loan or property loan for one year in advance, NOW. Also take advantage of a 3-year fixed rate that may be lower than the standard variable rate. This will give you next year's tax deduction immediately, and a nice refund cheque in August 2006, not August 2007. You can pre-pay up to 13 months in advance. Check with your bank or financial institution for full details.
3) Pre-pay business expenses or work-related expenses
For example car or equipment leases, buying tools or equipment, superannuation contributions or pre-paying your income protection insurance. Get a whole year of peace of mind and an early refund cheque as well!
4) Donate to your favourite charity
Clean out your shed, your wardrobe and your wallet, and give away some of that cash or those things that you no longer need. This can make you feel all warm and fuzzy and also mean that the government may give you some cash back.
Donations are not just for the tax-conscious. They can also be good karma and help you to make more money.
US Financial Planner Suze Orman appeared on the Oprah Winfrey show and showed the difference between a "closed palm" and an "open palm". It seems pretty lame for a serious Financial Planner to show the difference between a closed fist and an open hand, but work with me here... Just visualise it.
Usually a fist has negative connotations. We speak of someone who may be "tight-fisted" and if you see someone making a fist, you generally get out of their way! When stressed or frightened, we often make the same gesture ourselves.
While a fist is good for defending yourself or clutching a weapon, it is not really that good for helping others. To provide assistance, you generally need to extend a hand, and to give gifts to others, you need an open palm.
When it comes time to RECEIVE, you also need an open palm and not a fist. When the world wants to give back to the givers, when karma comes back and when it is time for the sowers to reap, you need an open palm to ACCEPT things.
Give generously with an open palm and you will receive abundantly, give a little with a tight fist and you will only receive a little.
There are many worthy causes to give donations to, including The Salvation Army, The Smith Family, Guide Dogs for The Blind, Oxfam, the Blue Nurses, Meals on Wheels, and of course the many charities that sponsor underprivileged children, providing food and education, both in Australia and overseas. Find a cause that you are passionate about and give them a call today.
Advice given is of a general nature only and you should seek specific advice relevant to your situation before proceeding with any investment decision.
“ While a fist is good for defending yourself or clutching a weapon, it is not really that good for helping others. ”