Tax Planning Strategy #5 – General Strategies
How would you like to legally reduce your tax by $500 or $1,000 or $5,000 or more?
Here’s how to do it:
The Strategy behind Tax Planning
The tax you pay depends on your taxable income (all assessable income less allowable tax deductions), and the tax rates that apply to that income.
Therefore, your tax is reduced if you:
1. Reduce your income, or
2. Increase your tax deductions.
Seeing we all want to earn more, reducing your income isn’t an option! But increasing your tax deductions definitely is.We have two important documents available for you, they are 2 Tax Planning Flyers which both list out a number of items that could be claimed as tax deductions. If you would like a copy of these flyers please contact Amy at our Office and she will email them to you. Remember to use these as a guide, but please CONTACT US if you have any questions or uncertainties about any of the options raised in the flyers.
To illustrate: If you need something in July that is classified as a tax deduction, it makes sense to bring this purchase forward and buy it in June. You then get the tax deduction this year, and not next year.
Warning: Don’t fall into the trap of buying something simply to get the tax deduction for it. If your tax rate (including Medicare Levy) is say 34%, you would only get 34% of the purchase price back as a tax refund (or reduced tax payable) from a tax deductible item. You DON’T get 100% of the amount that you spend back as a tax refund (or reduced tax payable).
But if you do need an item for your business or your work and it is tax deductible, we recommend buying it BEFORE 30 June so that you get the tax deduction this year.
Your Tax Planning Strategy Checklists
Please contact Amy on 03 9816 6200 for a copy of our Tax Planning Checklists. There is a Tax Planning Flyer for Individuals and a Tax Planning Flyer for Business Owners.
If you are a business owner, please review BOTH the Business Owner’s Flyer and the Individual Flyer because both of these apply to you.
Help us to help YOU!
If you spend a little bit of time with us to review your financial situation and discuss your tax planning options, you could end up saving yourself thousands of dollars.
Now’s the time to do it – please contact our office TODAY to get started!