It’s important to regularly review your finances, and whilst a lot of us have some extra time on our hands at home due to the COVID-19 pandemic, now is a great time to check in. There are a few things to look out for when putting in your tax return that could serve as great learnings for the year ahead.
Optimise your super
Your superannuation is a great way of making highly tax-efficient savings. When you work through your tax return, establish whether you could be making more contributions via salary sacrifice, or by contributing to a spouse’s fund. It might also be an appropriate moment to establish whether a self-managed super fund might be suitable for you in the future. You can use this calculator to figure out if you’re optimising your super contributions for tax purposes.
Make the most of benefits
Particularly in the past couple of years, government subsidies and concessions have been rapidly changing to keep up with demands put upon the population by the global pandemic. Make sure you’re across these benefits and how they apply to your situation. You might also choose to manage the timing of your expenses, deciding which tax year to purchase them in to ensure you manage thresholds and optimise your deduction potential. Check the latest updates on tax deductions here.
Decide where to save and what to pay off
Looking at what you’re being taxed on can help you to decide where to put your money in the year ahead. Consider your investment accounts, your mortgage and any savings you’re making and then weigh up the benefits of things like accruing interest on investments versus paying tax on what you’ve earned. Contrast this with the benefits of paying off your mortgage, and don’t forget to factor in what will bring you the greatest peace of mind. If you’d like to talk about your taxes, budget or financial plan for the year ahead, or review the tax year that was, book a time to chat here and let’s discuss what’s best for you.
Information provided is general in nature and given in good faith and for the information purposes of Australian tax residents only. As the application of tax law depends on each person’s individual circumstances, in turn it is important you seek independent, professional taxation advice. The complexity of taxation laws and rulings is such that any taxation advice should be specific to your circumstances. For comprehensive advice regarding the taxation implications that takes into account your personal circumstances, please contact a registered tax agent, tax (financial) adviser or the Australian Taxation Office.