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Christmas giving (tax free!)

The holiday season is a great time to think about giving a little back to those less fortunate than you, and many Australians will make charitable donations. In Australia, charitable donations are tax deductible, which only adds to the incentive to be generous this year.

A recent global survey of charitable giving across the world has shown that countries that award taxpayers benefits for donations report much higher rates of donations per capita.

Here are some tips for maximising your tax breaks on donations tis year:

1. Make sure that the charity that you donate to has tax-exempt status from the ATO
2. Keep your receipts! You may need it if you are audited
3. If you are making a large donation, discuss the tax implications with your accountant, just to be on the safe side
4. Remember that you can only claim gifts as a tax deduction. This means that if you have received anything in return for your donation, for example, a raffle ticket or trinket, you may not be able to claim the deduction.

Posted on 22 December '14 by , under Tax.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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