I need some suggestions & tips please - to bring my taxable income to under 90K.
Every year my deductions are around 2K (car, work form home….etc.), This will bring my income to 94K, still need to think about at least 4k. The only option I think of is salary sacrifice to my Super but that's not so easy with my employer.
Anyone has any better ideas ? I work in a entry level IT job.
Much appreciate your time.
That's a good one. I did not know about it so far. But a quick google search on it saying that, it needs yearly costs for audit & yearly supervisory levy. Not sure how easy it is to do ? Sorry no offences just thinking through.
Cost is paid out of the SMSF. It isn't out of personal income.
Superannuation IS personal income - it's just money you don't get access to for years (and the more you lose now, the far worse off you're likely to be later due to the magic of compound interest).
Yes, the setup fees are paid out of super (and don't impact your assessible income), but it's still lost money - lots of it.
@hudrob: If you think of super as lost money then can't help you.
Lucky my SMSF administrator charges less than $1k a year.
Go see your tax accountant !
He/she is the one doing you tax
You don't need to salary sacrifice. You can make voluntary contributions.
But I heard salary sacrifice is better as it is only taxed at 15% compared to normal tax rate
Same, difference is you'll get a tax deduction if you claim the contribution
Requires filling in the intent to claim form with your superfund prior to their applicable cut off date though
No the net effect is exactly the same once you lodge your tax return.
You can get tax returns for personal super contributions, subject to certain rules - Claiming deductions for personal super contributions
Salary sacrificing is more convenient if your employer offers it as you get the tax discount up front rather than having to claim it back and there's less paperwork for you.
Voluntary super contribution and then fill in notify form to super fund prior to any cutoff period for FY
Contribute $6k to super. Find the form on your super fund website
Can we claim "after tax contribution OR voluntary contribution" as a deduction at tax return ? So for example if send 5K from bank account to Super and then fill the form to notify. Then my taxable income will be 94k - 5k = 89K ?
And make sure when you contribute to super you leave enough time for the super fund to receive the funds by the end of the financial year. In addition don't forget to fill out the form.
Donate 6k to me.
I could be wrong (not an accountant) but I'm pretty sure you can't avoid the MLS by claiming deductable super contributions. The MLS is based on taxable income for surcharge purposes, not the taxable income you otherwise pay income tax against. The income for surcharge purposes includes reportable super contributions and deductable personal super contributions, at least that is how I read it here: https://www.ato.gov.au/Individuals/Medicare-and-private-heal…
A voluntary super contribution would reduce your taxable income but it is then added back on when determining liability to pay the surcharge. Again, not an accountant, merely my understanding from reading that page but do seek professional advice to confirm.
Do you think there is no option at all for me now ?
this is correct
May be pay a fair share of taxes?
With all your financial advice and plugs for crypto/stonks in every second post on here, are you honestly going to say you don’t look for ways to lower your own personal taxable income?
Go tell that to papa Elon, not average joe trying to save a few bucks.
Crypto isn't a particularly good vehicle for avoiding taxes, and even grifters can sometimes be a little nationalistic.
Aren't you the guy who borrows against your crypto at 1% instead of selling it at a profit to avoid CGT? Talking about double standards.
Reportable super contributions still count towards your income for Medicare levy surcharge purposes.
See https://www.ato.gov.au/Individuals/Medicare-and-private-heal…
EDIT: Beaten by saitaris.
Can I buy some work related items and increase my deductions ?
Do you think that will work ?
Enroll in a work related education course and pay up front. Even if you don't start the course until end of tax year it is cash out the door that matters.
Find a conference in the Bahamas related to your job for "educational" purposes ;)
or
Donate to the OzBargain Non-Profit Organization :P
or
Take a loan out for $250k in shares/crypto/house, claim all overheads and interest before EOFY ;)
Take a loan out for $250k in shares/crypto/house, claim all overheads and interest before EOFY ;)
👍
Could also buy job related equipment like PC / Laptop / Uniforms / etc :P
Yeah exactly. The key here is to find the conference before you book the flight and make sure it's related to your actual occupation. Then you can book a first class flight if you want, and if you are at the top end of the tax bracket (you aren't but you might be at some point) the taxpayers give you 47.5% back. Now that is a true OzB deal.
At 90K OP is around 27.5% average tax rate.
That’s why I said you might be at some point. Aspirations.
Income protection, donation to charitable trust, self-education expenses.
I guess you could take out private medical insurance; to avoid MLS in future years.
(Someone had to say it).
take out a share margin loan and pre-pay the interest
As some have mentioned you can’t use super contributions to reduce your taxable income for the purpose of the MLS, but you can still claim a tax benefit from adding to super. Just as an example, if someone has a taxable income of $94k, the MLS will be $940, but if they contribute an extra $6k to super, they will get a tax benefit of around $1000, so the super benefit offsets the MLS. Just depends whether they want to contribute this amount to super or not and if this fits within certain super caps.
Alternatively, they can find a partner who earns less than $86k, so their MLS threshold increases to $180k.
Not financial advice, speak to a professional if in doubt.
Wait, so this dude is whinging about $940 from the Medicare Levy Surcharge right?
They're earning 96k, I earnt 47k last year as I broke my leg and was off work for 3 months 🙃. Anyway, I paid $950 in MLS….
So wtf
Edit: apparently I'm not meant to have to pay it if I earn less then 90k? Or 180k with a spouse (which we most definitely do not LMAO) yet I've always had to pay it…
Edit 2: the last 2 other financial years I've paid over a grand in MLS, still not earning near the thresholds… am i actually meant to be having to paying this or what??
Medicare levy vs Medicare levy surcharge.
Ah right. Thank you
Get married. Even if you do it on 30th June your income requirement for MLS goes to $180k an individual and as family.
Easy, take a few weeks Leave Without Pay before 30th June
You could renegotiate your salary and get paid less but get paid more annual leave hours.cash in the annual leave next year. You would need a flexible employer to do this.
Someone said this: You don't need to salary sacrifice. You can make voluntary contributions…..and someone poo pooed it - I think this allows for a deduction like your other deductions so the net would be less than your gross at time of tax return and should allow you to get under the tax threshold
You can make voluntary contributions…..and someone poo pooed it - I think this allows for a deduction like your other deductions
And you'd be wrong, which is why the idea was poo pooed. See https://www.ato.gov.au/Individuals/Medicare-and-private-heal…
Ask your accountant. This is not an appropriate place to receive financial advice (or for people to give it).
How about an SMSF in addition to your default employer's one?