How many times have you dreaded lodging your tax return only to leave it to the last moment (or even lodge it late…), only to receive a big bill from the ATO.
The key to paying less tax is to be prepared. Some of the most valuable tax-reduction strategies are available for you to utilise to reduce your tax bill right now!
Here there are some options for you:
- Spouse contribution: you can contribute to your spouse’s super if their income was less than $40,000 yearly and you receive a tax offset from the government of up to $540.
- Salary Sacrifice: you can contribute from your gross salary straight into super and this amount will be deducted from your taxable income
- Government Co-Contribution: Do you have a low income? You can receive a co-contribution from the government of up to $500 paid into your super if you make an after-tax contribution of $1,000. This is potentially a 50% return on investment. *Income limits apply
- You can top up your super making after tax contributions and claim that as tax deduction in your tax return, reducing your taxable income. Remember that you need to complete a Notice of Intent to Claim and send that to your super fund.
- Do you have Income Protection policy outside super? If so, you can also claim the premiums you paid over the entire financial year.
- You can make catch up contributions to your super if your contribution from last year did not reach the Contribution Cap limit ($25,000) and if your super balance is lower than $500,000.
- Under certain conditions, you can also claim your Financial adviser’s fee’s provided that the costs are related to advice given which leads to or is directly associated with specific investments that produces assessable income.
- If you are over 60 and still work, we can work on a Super recontribution strategy to provide a tax benefit to you.
- If you are over 60, you have the option to open a Transition to Retirement account and create some tax-free income
- If you have a loan for an investment purposes, you can claim the interest, management costs, fee’s etc in your tax return as tax deduction.
- Another Strategy available is prepaying interest, known as Interest in Advance. This can be claimed for investments incurred in gaining or producing assessable income.
The strategies you can use will vary according to your personal situation.
Also, have a chat with your accountant as well, to run through your other tax reduction strategies, as there are plenty more options as we have focused on tax deductions related to Superannuation, Income and Investments.
It might be worth considering and discussing COVID-19 home Office and other allowable expenses related to your employment type with your Licensed Tax accountant.