Making a significant amount of dollars each year and knowing how to use it effectively to avoid paying so much in tax are two very different things – take advantage of our expert tax planning tips to save more money come the end of the financial year.
Make Additional Contributions to Your Superannuation Fund
Being able to grow your retirement savings is a good enough reason on its own, but one of the best parts about making super contributions is that it reduces your overall tax liability – Since July 1st 2024, you’re now able to make up to $30,000 worth of contributions (including employee contributions) under the concessional contributions cap, so keep this in mind when making your next tax return.
Utilise Private Health Insurance to Avoid the Medicare Levy Surcharge
You’re legally obliged to pay the Medicare Levy, which is 2% of your taxable income if you make over $27,000 annually, but it’s an additional 1-1.5% if you’re making over $90,000 and don’t have private health insure – as such, it’s strongly recommended that you acquire private health insure in order to not only get better care and lower wait times but avoid this surcharge, too.
Negative Gearing for Property Investments
This is essentially when the expenses of owning an asset, like a property, for instance, end up exceeding the income it is providing. This can be pretty problematic for most casual investors, but, fortunately, high income earners should be able to deduct some of these losses against any other income they have, such as their salaries. In fact, this is actually a pretty common strategy for those who have negatively geared properties, where tax deductions from property expenses will outweigh the rental income.
Make Regular Charitable Donations
Aside from generally just being a nice, philanthropic thing to do, any donations you make to Australian Deductible Gift Recipients (DGR) are actually tax deductible. Fortunately, you’re not short of options to choose from here, but I’d recommend supporting a cause or charity through DGRs – alternatively, you can choose to explore options like The Smith Family or The Australian Red Cross.
Claim Expenses for Ongoing Education
Finally, any kind of expenses that you incur for further study (like going back to University to get a Masters Degree, for example), professional development, training, or even just self-education that will ultimately enhance your skills in your current role are actually all tax deductible – in fact, you can even claim deductions for executive coaching.
Not only does this generally mean you’re going to have more opportunities to make more money as you’ll be even more qualified, but the tax deductions are massively helpful in minimising your overall tax burden and improving your financial health, too.