The Ultimate Tax Planning Recipe
Prep Time: Right Now
(And Your Wallet)
The Next Couple of Months Leading to Tax Season
Ingredients
The Base:
1 cup of Understanding Your Income: Fresh, right out of your payslips and investment returns. This is your base; everything builds on this.
The Spices:
A spoonful of Deductions: Gather all those receipts, work-related expenses, charity donations, and anything else that can reduce your taxable income. It’s like finding extra herbs in the back of your cupboard — a small addition can make a big difference.
A dash of Super Contributions: A perfect way to lower your taxable income and spice up your future financial health. It’s the saffron of our recipe!
The Sauce:
Generous pours of Income Splitting (if applicable): If you’re cooking with a partner, consider how you might be able to balance your ingredients to make a more favourable tax dish.
A dollop of Negative Gearing: Like a rich, complex sauce, this can add depth to your investment strategy, but it’s not for every meal.
The Garnish:
A sprinkle of Professional Advice: No great dish is complete without a garnish. This is where your financial advisor or accountant adds the finishing touch, ensuring your tax planning dish is perfectly seasoned to taste.
Instructions
Preheat Your Financial Oven: Get a clear understanding of your income. This sets the stage for everything else — no one starts baking without preheating the oven. Well, no-one with any business being in the kitchen, anyway.
Mix Your Base: Start by mixing in your income. Know what you’re working with — whether it’s from a job, investments, or both.
Add the Spices: Now, let’s spice things up! Add in your deductions carefully. Every bit helps to reduce that overall taxable income, making the flavour of your financial future just right.
- Tip: This is MUCH easier done well in advance. Keep track of potential deductions throughout the year and freeze until you’re ready to cook.
Stir in Super Contributions: Gently fold in those super contributions. Not only are you investing in your dough, but you’re also seasoning your future to taste much better.
Prepare the Sauce: If it suits your meal, consider the sauce of income splitting or negative gearing. These can add a rich flavor but remember, our palates are all different. What works for one may not work for another.
Let It Simmer with Professional Advice: The best dishes are those tasted and adjusted by a professional. A sprinkle of professional advice ensures your financial dish is balanced and seasoned to perfection.
Serve and Enjoy: Presented beautifully on a plate of smart financial choices, enjoy the fruits of your labour. Here’s to a dish that not only satisfies but sets you up for many more feasts to come.
Post-meal Tips:
Keep those leftovers! Always review your financial situation annually; what worked this year might need tweaking next year.
Share the recipe. Helping friends or family with their financial cooking and share the joy.
Recipe Variations
Have some preferences or intolerances to cater for? Here’s a couple of tweaks to keep in mind:
Defer income: If your business can afford to wait a bit, consider holding off on some income until the new tax year.
Negative gearing: Bear with us – it might sound strange, but sometimes spending more than you earn initially can work out for you in the end.
Concessional super contributions: Delivering a portion of your salary into your future retirement fund could help to reduce your present tax.
Salary packaging: Carefully structuring your salary, like packing a compact suitcase, could save you money.
Restructuring: If you’re a high earner, holding investments indirectly might be a slick move.
Work-Related Deductions:
- Home Office: Yes, you can claim portions of your home-related bills if you work from home.
- Professional Development: Furthering your skills = tax deductions. Win-win!
- The Tools of Your Trade: Laptops, stationery, or even protective clothing – all valid claims.
- Travel Expenses: Hitting the road for work? Log those k’s.
- Income Protection Insurance: A sensible move and potentially deductible too.
