Minimise Your Personal Tax
2021 Tax Planning Guide
Now’s the time to review what strategies you can use to minimise your tax before 30 June 2021.
Imagine what you could do
with tax saved?
- Reduce your home loan
- Top up your super
- Save for a holiday (when we can travel again)
- Deposit for an Investment Property
- Pay for your children’s education
- Upgrade your Car
The most important thing to remember is that there is no point in spending money to get a tax deduction, unless it’s going to result in something useful for you.
6 Tax Planning Strategies & Tips – High Income Earners
- Tax Planning Strategy – Home Office Expenses
Many of us had no option but to work from home since the beginning of the pandemic last year. Even though restrictions are generally over, many have either chosen to continue working from home, or still being forced to work from home. So, lets make the most of the deductions available to you.
The first option is to claim a flat rate of 80 cents per hour for the hours you are working from home. This covers you for all the costs including heating & lighting, telephone and internet and small equipment and assets.
The second option is to claim 52 cents per hour for the hours you are working from home, plus a portion of the cost of your telephone & internet, furniture, computers, printers, and Stationery.
We will work with you and calculate the best method for you to use.
It is strongly recommended that you keep accurate records of the hours that you spend working from home. In some cases, it is wise to keep a diary of when working from home and obtain a letter or documentation from your employer that you were required to work from home.
- Tax Planning Strategy – Pay Extra Superannuation Contributions
The annual Concessional Contributions Cap for Superannuation is $25,000. If your contributions are less than this, you are able to top up to the maximum of $25,000 and claim a tax deduction. This will in turn reduce the amount of tax you pay and at the same time, build up your retirement nest egg.
Bonus Tip – if your Super Balance is below $500,000, and you didn’t contribute $25,000 last financial year, you can top up the difference this year. It is a great opportunity to build that retirement fund with some person tax benefits.
- Tax Planning Strategy – Prepay Interest on Deductible Loans
If you have any loans that are used for investment purposes, either for a rental property or an Investment Portfolio, you may want to speak to your bank about prepaying the interest. Admittedly, this strategy only works well in the first year (where you will pay double interest), but it can help to bring forward a deduction in this year to reduce the tax payable or increase your refund.
- Tax Planning Strategy – Income Protection insurance
The last year taught us many things, and highlighted that global health risks can be spread quite quickly. This is not a scare tactic but a suggestion that income protection insurance could well be a great investment. It is also tax deductible to you. If you have thought or thinking about taking out income protection insurance, the benefit of getting a tax deduction may help you make that decision.
- Tax Planning Strategy – Charitable Donations
If you have a favourite Charity that you’ve thought about supporting, then now is the time to make that happen – but please – remember to check that the charity is an Australian Deductible Gift Recipient (DGR). Click here to check if the charity is listed on the DGR.
6. Tax Planning Strategy – Professional Advice
Getting professional advice on your personal tax position can be a valuable investment for you and your wealth creation. The cost of this advice from a Registered Tax Agent will be fully tax deductible in year you incur the expense.
Now is a great time to make an appointment with us to plan your next few months to take advantage of the tax strategies that are available to you.
We are available through email at firstname.lastname@example.org or call on 03 9374 8400
Download our extended guide by clicking the link below.
Do you have any questions? Call us on (03) 9374 8400 to speak to our team.