Tax planning is one of the key factors in building and maintaining your wealth but all to often it becomes a reactive/last minute effort to organise tax deductions to maximise your refund.
A better approach is to start early and engage professional help from FWD Financial, as the longer you leave these plans, the less benefits you are likely to receive.
The tax planning strategy you choose will depend upon your personal situation and needs but there are two simple ways to manage your tax:
- deferring income till next tax year, for example, ensuring investment income is paid after the end of this financial year; or
- paying for expenses this financial year, such as interest on an investment loan rather than next financial year.
There are also many other alternatives for reducing your tax than these simple strategies which may result in an overall better return in the long term.
For example and broadly speaking, some of the options include converting part of your income into superannuation contributions (salary sacrificing or making personal deductible contributions). This has the added advantage of building a valuable asset and an income for your retirement. In addition, don’t forget the tax incentive for making a contribution toward a superannuation fund in your spouse’s name.
Also different options are available depending upon your employment status, that is whether you are self-employed as opposed to being an employee. If you are a small business owner, you could consider bringing forward the purchase of business assets. Whilst the instant asset write-off eligibility criteria and threshold have changed over time, there are currently three temporary tax depreciation incentives available to eligible businesses; temporary full expensing, increased instant asset write-off, and backing business investment.1
Again, the strategy you choose will depend upon your personal situation and needs – starting your tax planning now is key. Please organise a time with us at FWD Financial or your Accountant now so you can have everything in place for June 30.
Act now and reap the rewards!
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.