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TAX PLANNING STRATEGIES – SURPRISING WAYS TO SAVE ON TAX (PART ONE)

As an individual or business owner you may be able to use tax planning strategies to minimise your tax bill in the lead up to 30 June 2019.  There are ways to arranging your financial affairs so that you do not pay more tax than you’re legally required to. Here are some of the ways to keep your tax bill to a minimum.

First Home Super Saver Scheme

If you’re eligible, you can arrange through your employer to make a voluntary super contribution up to $15,000 of your salary towards your home deposit. When you access these funds to buy a home, instead of being taxed at the marginal tax rate that usually applies to your salary, the funds are taxed at a lower rate of 15%.

Tax-deductible superannuation contribution

Tax deduction for making a personal superannuation contribution has opened up to all eligible Australians, not just the self-employed. There are limits on how much you can contribute each year, and you must notify your super fund of your intention to claim.  Your contributions are taxed at 15% when received by the fund, which for most people is lower than their marginal tax rate.

Prepay expenses

Prepay future expenses to qualify for tax deductions within this financial year. For example, investment property owners may be able to prepay costs like:

  • Repairs
  • Maintenance
  • Strata fees
  • Insurance.

Other possible expenses to pay in advance include:

  • Rent
  • Insurance
  • Subscriptions to professional associations.

We will provide further tax saving tips in our next article.  Make sure you follow The Property Management Collective to keep up with tax savings ideas!