Tax Minimisation Strategy #1
2017 Tax Planning
Patrick Hoey will be keeping you informed via regular blogs on tax minimisation strategies for you to consider at this time of year. Of course please get in touch with us to discuss any of these strategies in more detail. Here is his first one:
Tax Minimisation Strategy #1 – Maximise superannuation contributions
You may be able to minimise the amount of tax paid by yourself or your business if you chose to maximise the superannuation contributions limits on behalf of yourself. This will not only immediately reduce the tax paid by yourself or company by reducing the profit before tax, but will also be in a low 15% tax rate investment structure, and ensure that there are adequate savings upon your retirement (which can then drop to 0% tax rate when you retire).
The super tax deductible limits are $30,000 for under 50 year olds, and $35,000 for 50+ year olds as at 30 June 2017. From 1 July 2017, this limit drops to $25,000. If you have wages income of 10% or more over the year, you will be required to salary sacrifice your super contributions from your wage. From 1 July 2017, this restriction will be removed, so you can pay directly to your super fund. If you choose to contribute more into super, we recommend you speak to your accountant re the tax advantages, and your financial planner regarding your investment strategy.