How you can make savings at tax time
Tax time makes everyone groan. How does it come around so quick? Haven’t I just finished last year’s tax? Wait, I still haven’t filed the last one!
Well, there is some good news too. It is possible to make some decent savings at this time of year and, in many instances you can build up your superannuation in the process.
Remember too, that one of the biggest advantages of superannuation is that the money you put in may taxed at the very low rate of 15% when you claim it as a tax deduction or by way of a salary sacrifice. Conditions apply so please discuss with your Financial Planner
If you can manage to put some money away via a salary sacrificing plan before June 30, you may be able to both boost your superannuation and reduce your tax at the same time.
You can put the extra money into your superannuation and this contribution will be taxed by the super fund at 15% which in all probability will be lower than your marginal tax rate.
It’s basically, a win / win situation and the sooner you get on to it, the more savings you will make.
Remember, there is an annual limit for most people that can be put into your superannuation by salary sacrifice and inclusive of your employer’s Super Guarantee Contributions For those under the age of 50, this limit is $30,000 and if over 50, the maximum is $35,000
Tax free boost
The potential for savings doesn’t end there. Depending on how much you earn, you may be entitled to a superannuation contribution from the Federal Government, where you make an after tax contribution
In most instances, this will be wage tested and you will need to come under an income ceiling that will apply to many low and even mid-range income earners.
This may be as much as $500 so speak with your Financial Planner soon to see if you are eligible to receive this payment.
If you fall into this category, you have some flexibility in the ways you can make contributions to your superannuation.
Think of it this way: you have some spare money during the course of a year and you decide to make a superannuation contribution, this may be tax deductible
Once you’ve done this, keep a record of it and then, when you are doing your tax, discuss with your tax specialist the extent to which it can be claimed as a tax deduction
It’s a really smart way to claim a deduction while adding to your retirement nest egg.
Helping your partner
Depending on your circumstances, you may be able to tip some of your money into you partner’s superannuation.
This is most applicable if your partner has either earned no money over the past year or brought home less income than the current $13,800 threshold.
If this sounds like your situation, you may be eligible for a payment of up to $540 from the Federal Government so it is worth exploring.
Supplement your income from your super
Now this all comes down to your age.
In many instances, once you’ve hit 56, you are able to start drawing on your super to supplement your regular income.
It might even mean you will have the freedom to ease yourself into retirement by cutting down on your work hours.
This can be a very attractive option as you don’t have to sacrifice your lifestyle because you are still living on the same amount of income. It’s just that part of it is coming out of your super.
To make an appointment to see one of our Financial Planners call us on 13 25 85 or book an appointment online.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with the assistance of a Financial Planner, whether the information is appropriate in light of your particular circumstances and needs.
Financial planning services are provided by Eastwoods Wealth Management Pty Ltd ABN 17 008 167 002 / AFSL 237853 trading as Beyond Bank Australia Wealth Management. Eastwoods Wealth Management Pty Ltd is a subsidiary of Community CPS Australia Ltd ABN 15 087 651 143 / AFSL 237 856 trading as Beyond Bank Australia.
Any general tax information provided is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.