3 Personal Tax Planning Tips

Posted on Jun 3, 2012 | 0 comments

The end of the 2011/12 financial year is almost here, so now’s the time to review what strategies you can use to minimise your tax.

Over the next few days we’ll be sending out a number of tips and strategies for your Personal and Business Tax Planning. Please take action now and don’t wait until it’s too late! 

1. Claim Your Education Tax Refund

Families receiving family tax benefit (FTB) Part A can claim a 50% refund every year for education expenses of up to $750 for each child at primary school (maximum tax offset of $375 per child per year) and up to $1,500 for each child at secondary school (maximum tax offset of $750 per child per year).

The refund is only available for certain expenses such as laptop computers, internet connections, educational software and textbooks.

2. Superannuation Contributions

Individuals may be able to make tax-deductible personal contributions to superannuation to reduce their taxable income. The advantage of this strategy is that superannuation contributions are taxed at 15% compared to personal income tax rates of between 31.5% and 46.5%.

Superannuation contributions are limited to $25,000 per year for a person under age 50, and $50,000 for a person aged 50 and over. Any contributions in excess of these limits can be potentially taxed at a rate of 93%. Do NOT go over these limits!

To be eligible to claim a personal superannuation contribution as a tax deduction, you need to satisfy the 10% test, meaning less than 10% of your assessable income for the year is from employment.

3. Ownership of Investments

A longer term tax planning strategy can be reviewing the ownership of your investments. Any change of ownership needs to be carefully planned in relation to any capital gains tax and stamp duty implications.

Investments may be owned by a Family Trust, which has the key advantage of providing flexibility in distributing income on an annual basis and an ability for up to $416 per year to be distributed to children or grandchildren tax free.

Talk to us TODAY before the 30 June 2012 deadline for assistance to reduce your tax!

Phone 07 5585 8555 for more information.

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