If your partner earns taxable income of less than $39,837 (up to maximum threshold of $54,837) and you put an after-tax contribution of $1,000 into super, the government will kick in $500. It’s a no brainer if you’ve got the cash.

Nobody wants to make a loss but if it’s inevitable, you should know how to utilise it to reduce your tax bill. Capital losses can be offset against capital gains reducing your taxable income but you need to get the timing right.

If you sell an investment and make a capital loss, this loss can only be offset against current year capital gains or carried forward against future year capital gains. The key thing to understand is that you cannot carry back a capital loss to a previous tax year.

In a previous blog we spoke about the timing of expenses and the Robin Hood effect.

Another option to bring down your taxable income in the current year is to pay staff their super a little earlier. This is ideal if your taxable income is high this year but may be lower next year.

The more you make, the more they take!

If you are earning $35,000 a year, you are currently paying 19% tax on every dollar made until you hit a certain income level. If you are earning $180,000, you will be paying 47% tax on every dollar made above this.

So, what can we do with this in mind?

In the last post I mentioned you can generally claim a tax deduction of up $25,000 for super contributions paid in the year (increasing from 1 July 2021 tax year to $27,500)

However, if you have a self-managed superfund (SMSF), you could potentially get a tax deduction for super paid of up to $52,500 in one year. i.e. using the contribution cap of two years in one year.

Superannuation contributions are a no-brainer at this time of year. You can make a lump sum contribution to your super that’s tax deductible (up to a maximum of $25,000).

This is ideal if you’re looking to lower your taxable income and especially helpful if you’ve got a capital gains tax event this financial year.

Around June each year, we are normally inundated with messages and advertisements telling us how we can save this tax time.

You may have heard someone at the BBQ trying to justify their latest purchase by saying something like “I was told I can write that off in my tax” or “Sur I can claim that back”. Well kind of..