It’s that time of year again. As we approach the end of the financial year, people who expect a tax refund will be straight onto lodging their returns. In the face of high cost-of-living pressures, households will want to maximise their refunds and ensure they capture all their legitimate tax deductions.
For some people, this will mean rummaging through the third drawer down, or searching their car for anything that resembles a receipt that may qualify as a tax deduction. While this may work for some, here are some useful tips to help people make wise tax decisions at this important time of the year. Journalism for the curious Australian across politics, business, culture and opinion.
The stage 3 tax cuts — originally proposed by ScoMo and watered down by Albo — come into effect next financial year, meaning that most people will be paying less tax on the same amount of income next financial year. It is important to understand these changes, as it may assist in determining if you bring forward or delay deductions — such as interest on investment loans being repaid in advance — or income between this financial year and next. Neale Prior Neale Prior To work this out, look at your taxable income and the rate you are paying, then compare the difference between the two financial years.
For example, someone earning $130,000 this financial year will be paying tax at 37 per cent for amounts over $120,000, while next year the tax rate drops to 30 per cent for amounts over $45.
