BEAN COUNTER: Use your super to reduce tax
I HAVE never met a client who doesn't like the idea of reducing their tax.
It's an area where accountants and advisors add value - not just at tax time but throughout the year.
Superannuation is an area where we find new clients structured inefficiently.
While it's great to add value straight away, we want to make sure people know there are a plethora of options open to them.
Life insurance is one of them.
While this expense is not tax deductible to your business, it is able to be paid out of your super, and you are able to make tax deductible contributions to ensure your super balance isn't affected by the premiums.
You should, of course, also seek professional advice to ensure this is right for your circumstances.
Insurance is an ever-evolving product and should continue to be reviewed by your adviser.
Just recently we were able to save a client around $7000 per annum on their insurances and this was before we structured it for most of it to become tax deductible.
This is a no-brainer for the business and best of all they barely have to lift a finger.
Continuing along the lines of efficiently spending your money, there are many options where you are able to pay your next year's premium so you can claim the tax deduction for the whole amount this year.
- Scott Baker is a director of Birtinya-based Mobbs Baker Wealth.