What can you do to reduce your tax and the tax paid by your business? The answer is quite a bit but it takes planning pre 30 June.
Here are our top tips:
Delay income - One off opportunity for high-income earners
Taxpayers with assessable income above $180,000 face an additional 2% tax on every dollar above this level. The 2% ‘debt tax’ is scheduled to end on 30 June. The difference in timing between the reduction in the FBT rate that occurred on 1 April 2017 and the removal of the 2% tax on 1 July offers a one-off opportunity to reduce your taxable income through salary packaging and other planning initiatives.
If you are likely to have a one off spike in income, for example from the sale of a business or other significant assets, it’s worth seeing if you can delay the sale until 1 July 2017 to avoid paying an additional 2% tax. Just be aware of how the arrangement is structured. In many cases the sale is treated as having taken place for tax purposes when the parties enter into the contract, even if settlement occurs at a later point in time.
If you are an investor consider prepaying 12 months of investment interest or paying for education courses prior to June 30. Managing this situation may be easier than you think and with some careful planning save you money.
Contact us today to discuss your Options.