Save
Tax tips for the new financial year
Just as many people make New Year’s resolutions, Australians should also look to make changes in the new financial year and become as tax effective as they can be, says one accounting firm.
Tax tips for the new financial year
Just as many people make New Year’s resolutions, Australians should also look to make changes in the new financial year and become as tax effective as they can be, says one accounting firm.
The new financial year is a great time for Australians to reassess their financial position and look for any tax benefits they qualify for, according to HLB Mann Judd tax partner Peter Bembrick.
One of the first things we should do is review deductible and non-deductible debt.
“Having high levels of non-deductible debt – such as a mortgage, a car loan or a credit card – is a disadvantage as no tax deduction can be claimed on the interest payments,” Mr Bembrick said.
Paying down this kind of debt should be a priority and any spare funds should be used to do so as quickly as possible, he said.
“Deductible debt on the other hand – such as the interest on a loan over an investment property or a share market portfolio – can be claimed as a tax deduction and should be paid off only after the non-deductible debt has been eliminated,” Mr Bembrick said.
Those looking to maximise their cash flow should consider having an interest-only loan over all their income generating investments, all the while making principal repayments on non-deductible debts such as a home loan.
“However, care must be taken when restructuring loans solely to avoid tax, as this can attract the attention of the Australian Taxation Office,” Mr Bembrick cautioned.
The types of investments being held is also an important consideration for those concerned with their tax liabilities. Tax-advantaged investments should always be considered, so long as they meet an individual’s long-term investment plan.
“No investment should be taken out purely because it receives favourable tax treatment, but by the same token, it is important to be aware of the taxation implications of the investment structure,” Mr Bembrick said.
“For instance, selecting an investment that returns discount capital gains or fully franked dividend income is a better option than choosing an investment that may offer the same return, but doesn’t have the same tax advantages.
“For individuals, family trusts and super funds, listed investment company dividends are often an attractive, tax-effective option as they are usually fully franked. They also come with the benefit of the CGT discount which shareholders can access if the company sells investment assets.”
Mr Bembrick said superannuation is another facet that warrants review, and super members should make sure their fund’s underlying investments and strategy are appropriate and overall performance will meet individual retirement goals and timelines.
“Undertaking a super fund review is a useful exercise, and people should look at the fees being charged, the type of investments the fund holds and whether the level of investment risk taken is appropriate for their needs,” he said.
Making voluntary contributions is one tax-effective technique fund members can use to improve their super savings, as long as these contributions remain within the mandated limits, Mr Bembrick said.
“It is always worth knowing what other funds are in the market, what they charge in fees and the type of investments they make,” he added
“As the superannuation balance grows, it may also be worthwhile to consider whether a self-managed superannuation fund is a good option.”
RELATED ARTICLES
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- ACE25 The Accounting Conference and Exhibition
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian AI Awards
- Australian Aviation Awards
- Australian Aviation Summit
- Australian Broking Awards
- Australian Cyber Awards
- Australian Cyber Summit
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Law Forum
- Australian Space Awards
- Australian Space Summit
- Australian Wealth Management Awards
- Australian Wealth Management Summit
- Better Business Awards
- Better Business Summit
- Broker Innovation Awards
- Broker Innovation Summit
- Budget Summit
- Commerical Finance Awards
- Corporate Counsel Summit
- Defence & National Security Workforce Awards
- Fund Manager of the Year Awards
- ifa Excellence Awards
- Lawyers Weekly 30 Under 30 Awards
- New Broker Academy
- Partner of the Year Awards
- Partner Summit
- REB Awards
- Rising Star Awards
- SME Bootcamp
- SMSF Technical Strategy Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Finance Summit
- Women in Law Awards
- Women in Law Forum
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.