Let’s be honest – none of us want to pay more tax than we have to.
You can save yourself a considerable amount each year by thinking about some strategies to minimise your tax burden. These strategies are widely available and can make a significant different to your annual bottom line.
One of the simple ways to start is a mortgage offset account. A good financial planner will advise the use of offset accounts connected to your mortgage. You not only reduce the amount of interest payable on your home loan, but it will also stop you paying tax on the interest you would have otherwise earned.
“Making after tax contributions to your superannuation can save you tax. Investing via superannuation is taxed at 15% on earnings and 10% on capital gains. This represents another way to minimise your tax. “
Discretionary family trusts can assist in reducing your tax. The trustee decides who gets the income and capital the trust owns. If the trustee has family on low incomes, they can be the beneficiaries of the trust. This means those in lower tax brackets can offset the tax for those on higher tax brackets.
Salary sacrificing is used more and more to make contributions to your superannuation from your pre tax income. The incomes tax reduction comes from receiving less salary and paying less tax, and salary sacrifice contributions to superannuation are subject to a 15% tax which puts more into your super than using your post tax income.
Knowledge is power. Your priority is to know exactly what tax you are paying and why. Know what your options are and understand your circumstances. The other priority is to keep good records – keep receipts for everything. Take a photo of the receipt on your phone every time you get one. Make a habit of doing it and at tax time, you will find it easier to tabulate your records and claim more.
We strongly recommend you seek out financial advice from a trusted and qualified financial professional who will be able to devise a financial strategy tailored to your unique needs so that you can feel confident about making tax savings.