Natallia Smith
(TruWealth Advice)

It’s that time of year again! Even with the tedium of on-again-off-again lockdowns in Melbourne, the months are passing super quickly, and EOFY is just around the corner.

Now is the perfect time to start planning your financial approach for the year ahead. While your financial advisor can’t do your tax, they can help you understand the implications of valuable tax plans and strategies. Tax efficiency can substantially impact the amount of wealth you build and how quickly you build it.

Making smart decisions now will enable you to work towards financial freedom and security during the next 12 months.

Here are 6 ways a financial advisor can help with tax planning for the year ahead:

1. Understand Deductions & Tax Breaks

The two most significant tax breaks for most wage earners are deductions and tax offsets. So, before you or your accountant complete your tax return, have a chat with your financial advisor about the deductions and tax offsets you could be entitled to claim. You might be surprised!

Did you know you may be able to claim a tax deduction for personal super contributions that you made to your super fund from your after-tax income, for example, from your bank account directly to your super fund? Check it out here: Claiming deductions for personal super contributions 

1. Develop Strategies to Accumulate wealth

Your financial advisor is forward looking and is likely see more of your financial picture than your accountant. As a result, they have a better understanding of the potential tax implications and how they will affect your investments, retirement, superannuation, annuities and so on.

If you can keep your tax bill low in the long run, you’ll have more money to invest or spend on other priorities, which will increase your financial and personal wellbeing.

1. Review your Investment Plan

Investment plans make your money work hard for you, and tax planning is a great way to help ensure you aren’t paying any more tax than you need to. Achieve your personal and financial goals with a personal investment plan combined with effective tax strategies.

1. Diversify Your Portfolio and Tax Strategies

If you invest in shares, it’s important to know that different investments will have different tax implications. Discuss the opportunities involved in diversifying your portfolio with the most suitable investments and tax strategies for your unique situation.

1. Create a Retirement Plan

Your superannuation is key to achieving your retirement dreams. EOFY is a great time to think about how your money can work for you at this stage of your life – no matter how far away it seems! Each year, your financial advisor can help you take advantage of concessional or non-concessional superannuation contributions to create the income you need for retirement.

1. Discuss the Impact of Downsizing

Are you thinking about downsizing or selling shares? Before you take this step, make sure you are aware of your options and the tax implications involved.

It is possible to build long-term wealth without paying attention to taxes. But becoming more tax-savvy can increase your wealth in the short and long term. Your financial advisor can work with you to review:

• Your current tax picture

  1. How to reduce your tax bill

  2. What strategies might be available to keep your taxes low over the long term

  3. Any changes in law, e.g. superannuation contributions, that may impact your situation

Speak to your financial advisor to make sure you’re in the best possible position to make tax-efficient financial decisions.

To review your tax strategies, please contact TruWealth on 03 8648 6534 or email contact@truwealthadvice.com.au for financial advice.

Disclaimer: This is general advice and does not consider your particular circumstances. You should not act on this advice without speaking to Truwealth Advice who can consider if it is right for you.