You can reduce your tax by hundreds of dollars, if not thousands with some of these strategies. Here’s how to do it: The Strategy behind Tax Planning The tax you pay depends on your taxable income, and the tax rates that apply to that income. Therefore, your tax is reduced if you: 1. Reduce your income, or 2. Increase your tax deductions. Seeing we all want to earn more, reducing your income isn’t an option! But increasing your tax deductions definitely is. We have shared below links to two Tax Planning Flyers which both list a number of items that could be claimed as tax deductions. You can use them as a guide, but you should contact us if you are not sure of anything. To illustrate: If you need something in July that is classified as a tax deduction, it makes sense to bring this purchase forward and buy it in June. You then get the tax deduction this year, and not next year. Warning: Don’t fall into the trap of buying something simply to get the tax deduction for it. If your tax rate (including Medicare Levy) is for example 34.5%, you would only get 34.5% of the purchase price back as a tax refund (or reduced tax payable) from a tax deductible item. You DON’T get 100% of the amount that you spend back as a tax refund (or reduced tax payable). But if you do need an item for your business or your work and it is tax deductible, we recommend buying it BEFORE 30 June so that you get the tax deduction this year. Your Tax Planning Strategy Checklists Business Owners: Click Here for our Tax Planning Flyer for Business Owners. Individuals: Click Here for our Tax Planning Flyer for Individuals. If you are a business owner, we will look at both for you. If you want to minimise your tax burden, then you need to help us help you and get in contact with us today! By spending a little bit of time with us reviewing your situation, we might be able to help you save thousands!! Now is the time to do it – please contact our office TODAY to get started.
This is one of my personal favourites. Debt optimisation (sometimes referred to as “Debt Recycling”), is a financial strategy which creates wealth over time, and improves an individual’s debt structure. Achieved in the majority of cases by: – Using all surplus income to reduce the home loan (non-tax deductible “bad debt”); – Creating or increasing investment debt (tax deductible “good debt”), by drawing against equity in the home; and – Using this borrowed money to build an investment portfolio. It is a great strategy that can be adapted to suit your goals and time horizons; though it is important to note that borrowing money to invest and budget are key components. Here is an example of how the assets and cash flow involved in a debt optimisation strategy can be used in a “split loan”: Where suitable, it is possible to extend on the strategy above by using the newly created investments as security for a margin loan, with the proceeds used to further invest. In this type of strategy, the interest costs are still generally met from the home loan, with investment income also used to reduce the home loan balance. Using a strategy like this allows you to decrease your bad debt over time, and replace it with debt that can be used tax effectively, whilst building an investment portfolio that can be used to help fund your goals.
We would like to share with you an article from the Chris Unwin Training & Consulting Services website entitled, “The Price of Survival”. If you are having second thoughts on getting Trauma Cover for yourself or a loved one, you might want to read this article to help you decide and understand the importance of having insurance, and just how much it costs in order to survive and overcome unexpected circumstances in life. Have you ever had a client tell you that Trauma Cover is very expensive? If so, how have you responded? My response was always:- “Compared to what?” I remember very clearly to this day my first introduction back in 1993 to a brand new product called Trauma Cover. I was shown a promotional video on which a woman in her mid-30s, who had been diagnosed with cancer and who had survived after the necessary medical treatment, simply stated that “If she hadn’t had $50,000 worth of Trauma Cover, then she wouldn’t have been able to have afforded to stay alive”. How much would $50,000 Trauma Cover cost for a woman in her mid-30s? Less than a cup of coffee a week – in this case, that was literally the price of survival. I would also like to tell you about an article that was in the Sunday Telegraph a few years ago from which I quote:- “For Yasmin Pallier, the difference between life and death is literally $80,000. That is how much the surgery to remove the aggressive tumor inside her head will cost. Time is running out for the 32 year old who has been given six months to two years to live without the surgery. “Because we haven’t got the money, we have to go on the public waiting list which is six months long”, she said. Yasmin’s mother, Michelle understands the pressures on the system, but said she can’t get past one irrefutable fact. “At the end of the day, if you don’t have the money, you don’t get the operation. The rich would get it – this I can’t swallow”. Where is the fundamental flaw in the “irrefutable fact”? Well, how much would $80,000 worth of Trauma Cover have cost for a 32 year old woman? Once again, less than a cup of coffee a week. The reality is that it’s not just the rich that would get the lifesaving operation – it’s anybody who has $80,000 worth of Trauma Cover and everybody can afford that.
Financial Fitness. From these 2 words, you would know that they are basically about finances and physical health. How can you tell if a person is financially fit? On the article What does being financially fit look like? By Paul Feeny, he discussed the outward signs of being financially fit, and the key on how to improve one’s financial literacy and fitness. Below are results of the commissioned online survey done in 2016 on 1,617 Australian workers aged 18 years and over to ascertain their financial fitness, as detailed on the article: All respondents were currently employed (either full time, part-time or casual). The results from this research found: 29% of Australians were financially unfit, with a fitness level of less than 95 out of 200. 32% of Australians had average financial fitness, with a fitness level of between 95 to 125 out of 200. 30% of Australians were financially fit, with a fitness level of between 125 to 160 out of 200. 9% of Australians were financially super fit, with a fitness level of above 160 out of 200. The average financial fitness of Australians is 50%, with a fitness score of 113 out of 200. It is common for most people to assume that they are financially fit and literate because they are professionals and have attained high education. But in reality, more and more people are worried about their financial health and are now willing to take charge to better their future. So what does financial fitness look like? One of the major keys to being financially fit is to have a plan. According to the article, “The same research referred to above found Australians are almost four times more likely to be financially fit, or indeed, super fit when they have a comprehensive plan, as opposed to those with no plan at all. When an individual engages an adviser to build a plan, their level of financial fitness is 30% higher than those without a plan. So, the best way to improve the financial fitness of Australians is to ensure they can build a comprehensive financial plan.“ A plan will give you a starting point to your financial journey. A reliable financial adviser is what you need; to provide you with an in-depth financial plan to make you more financially fit and literate. So, if you are looking to get in shape financial-wise, this is a great opportunity to join our PCR family, and become financially fit!