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    Minimise Your Personal Tax – Your 2024 Tax Planning Guide

    Now’s the time to review what strategies you can use to minimise your tax before 30 June 2024.

    Imagine what you could do with tax saved?

    You could:

    • 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.

    Home Office Expenses

    If you have been working from home, you may have expenses you can claim a tax deduction for.

    The ATO allows you to claim using a “Revised Fixed Rate Method” an amount of $0.67 per work hour for the 2024 year. This amount covers most expenses from working from home, and you need to keep a detailed record of how you calculated the number of hours you are claiming.

    You can also claim expenses using an “Actual Cost” method – so please keep all invoice and receipts during the entire year to prove all claims.

    Superannuation Contributions

    While you might not be flush with cash now and able to put large amounts into superannuation, it’s important that you are aware of what is possible to maximise your super balance and possibly reduce your tax at the same time.

    Deductible Super Cap of $27,500 for Everyone

    The tax-deductible super contribution limit (or “cap”) is $27,500 for all individuals under age 75. Individuals need to pass a work test if over age 67.

    To save tax, consider making the maximum tax-deductible super contribution this year before 30 June 2024. The advantage of this strategy is that superannuation contributions are taxed at between 15% to 30% compared to typical personal income tax rates of between 34.5% and 47%.

    With super contributions taxed at a maximum of 30% and investment earnings in super taxed at a maximum of 15%, both these tax points are more favourable when compared to the highest marginal tax rate of 47% (including the Medicare levy).

    Carried Forward Contributions

    Carry-forward contributions are not a new type of contribution, they are simply new rules that allow super fund members to use any of their unused concessional contributions cap on a rolling basis for five years.

    This means if you don’t use the full amount of your concessional contribution cap ($25,000 from 2019 to 2021, and $27,500 for 2021 and 2023), you may qualify to carry-forward the unused amount and take advantage of it up to five years later.

    Carry-forward contributions are calculated on a rolling basis over five years, but any amount not used after five years expires. These carry-forward rules only relate to concessional contributions into super, not non-concessional contributions, as they have different caps.

    After this year any unused 2019 concessional contributions cap will be lost forever – so now is the time to carefully consider this!

    Spouse Super Contributions

    You can make super contributions on behalf of your spouse (married or de facto), provided you meet eligibility criteria, and your super fund allows it. This is known as contribution splitting. 

    Doing this not only helps to boost your spouse’s retirement savings, but it can also help you save tax if your spouse has limited income.

    You may be eligible for a tax offset of up to $540 on super contributions of up to $3,000 that you make on behalf of your spouse if your spouse’s income is $37,000 p.a. or less.

    The offset gradually reduces for income above $37,000 p.a. and completely phases out at $40,000 p.a. and above.

    Additional Tax on Super Contributions by High Income Earners

    The income threshold at which the additional 15% (‘Division 293’) tax is payable on super $250,000 p.a. Where you are required to pay this additional tax, making super contributions within the cap is still a tax effective strategy.

    Important Information

    You find even more ways to save tax by reading our recent blog:

    16 Ways to
    Reduce Your Tax

    Contact us before the 30 June 2024 deadline for assistance to reduce your tax!

    This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountant. Information is current at the date of issue and may change.

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