Individuals have fewer choices when it comes to reducing taxes but there are still opportunities depending on your circumstances. Salary and wage earners will have limited flexibility over direction of their income. Salary packaging can provide some tax benefits. Beyond that however it will be more a matter of how you structure your other investments to help minimise tax and optimise your tax outcome. This applies at both an income and capital gains level. The use of trust structures, appropriate negative gearing, and maximising the benefits of franking credits can all assist in reducing your tax exposure.
Business owners and the self-employed have greater flexibility over how they receive their income and you should take advantage of this. Smart tax planning causes income to fall in the right places and maximises the use of lower marginal tax rates.
All of this requires some focus and attention early in the process. Don’t wait until your tax liability is ‘hurting’ you. Take advice early and have a tax plan to ensure that your tax outcomes are as efficient as possible.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
If you are a business owner or self-employed and are seeking professional help reducing taxes, speak to the team at Impact Accounting today.