With the end of the financial year approaching, it’s a great time to make smart decisions about your finances, and taking action before 30 June can open up more opportunities for you.
We know that there isn’t a one-size-fits-all solution to wealth management. So we’ve outlined five tax-effective strategies that you could benefit from.
1. Get more from your salary or bonus
|If you are||An employee.|
|You may want to…||Sacrifice your pre-tax salary or bonus into super rather than receive it as cash.|
|So you can…||Reduce tax on your salary or bonus by up to 34%.
Take advantage of the contribution cap that applies in this financial year.
2. Get a super top up from the Government
||Earn less than $49,4881pa, of which at least 10% is from employment or a business.|
|You may want to…||Make a personal after-tax super contribution.|
|So you can…||Qualify for a Government co-contribution of up to $500.
Increase your retirement savings.
3. Boost your partner’s super and reduce your tax
||Have a spouse who earns less than $13,8001pa.|
|You may want to…||Make an after-tax super contribution on their behalf.|
|So you can…||Receive a tax offset of up to $540.
Increase your spouse’s retirement savings.
4. Pre-pay investment loan
||Have (or are considering establishing) a geared investment portfolio.|
|You may want to…||Pre-pay 12 months’ interest on your investment loan.|
|So you can…||Manage your cashflow more efficiently.
Potentially pay less income tax this financial year.
5. Pre-pay income protection premiums and reduce this year’s tax
|If you are||Employed or self-employed.|
|You may want to…||Pre-pay 12 months’ income protection insurance premiums.|
|So you can…||Claim your tax deduction upfront.
Pay less income tax this financial year.
If you are considering additional contributions to your superannuation, you should be aware of the contributions caps – and the proposed changes to these caps as part of the 2016 Budget. If you exceed contribution limits, you may have to pay additional tax.
Of course, if would like to discuss the strategies that are right for your own situation, please call either Sam or Victoria.
Should you require more information on your entitlement to tax deductions, offsets, and other tax liabilities, speak with your registered tax agent.
Super strategies should be in consideration of concessional and non-concessional caps.
1 Includes assessable income reportable fringe benefits and reportable super contributions. Other eligibility conditions apply.