Taxpayers are legally able to minimise their tax liabilities.  Here is three keys tip of tax planning advice

Timing and tax threshold – Unused Annual leave

If you are retiring from work or leaving a longterm employment position then timing of the final payout is important. Delaying the payout to the first week of a new financial year can have a material effect on the tax paid.

Planning ahead to the next financial year

Keep updating the legislation and tax rate and tax threshold.  Changing in taxation law will be announced on the budget night in May each year. To find out how these changes affect your position consult with a tax agent.

Negative geared assets

The tax act allows taxpayers to purchase Shares or Rental property with borrowed money. The interest cost generally results in a negative return for the taxpayer. This negative gearing or loss is tax deductable against normal PAYG income

Tax planning & wealth Creation

When deciding to purchase tax deductible expenses or assets consideration as to the cost after tax is required

Paying tax may be cheaper than purchasing a tax deduction that is unable to produce more wealth.

At year end there are schemes promoting themselves as offer instant tax deductions if you invest. Many of these opportunities turn in to a wealth destruction zone.

Purchasing tax deductions offers a taxation shield of 30% (Company 30%, Individual varies from 18% to 46%) This means for every dollar spent tax is reduced 30 Cents but at the same time your wealth has reduced 70 Cents. If the dollar has been spent on productive assets associated with a wealth creating enterprise all is ok. If the expense is not necessary then paying tax may well have been cheaper, especially if the imputation credit generated when a company pays its tax is refunded via dividends in an individual return.