Easy tax hacks that can save you $540


Editorial image of a couple walking with a pile of one hundred dollar bills representing retirement, taxes and money

With only two months left until the tax deadline, you need to act now if you want to save money. (Source: Getty)

With the cost of living at an all-time high, households across the country are hitting breaking point. So the last thing you and your family need this year is a shocking tax bill. We are just over two months away from the end of the fiscal year. If you want to save money, now is the time to act.

The good news is that there is one superannuation move. This will dramatically and immediately reduce taxes significantly. Let’s be clear, this move will help secure your future and do it for less. It should always be the ultimate goal of smart money management.

read more Nicole Pedersen McKinnon:

Your smartest super move

Well, this strategy is for couples. It is also for those who earn less than others and is ideal when one person is working fewer hours of paid work because they are caring for children or elderly parents. target.

In fact, the technique is widely used because low-income spouses don’t have to be earning at all. And if you qualify, your family should use it every year.

A $3,000 after-tax contribution from a higher-income spouse to the retirement pension of a spouse earning less than $40,000 a year will allow the payer to receive a maximum tax deduction of $540. It is very logically called spouse contribution.

Why does the word “top notch” come up? This is because “offsets” are cut directly from the top of the tax bill, unlike tax credits, which reduce the amount of your income before taxes are calculated. Think of it like an instant refund. In this case, from $3,000 almost overnight he gets a $5,40 discount.

Who gets the full net worth of $540?

The $540 spousal contribution offset is reduced for income over $37,000, eliminating $40,000 entirely. Remember, this is the sum of your reportable benefits and your reportable employer superannuation contributions, in addition to your taxable income. At full rate, the offset is calculated as her 18% of her $3,000.

Personal deductions for donations cannot be claimed first. Also, you can claim the offset only if your spouse’s total retirement pension balance as of June 30, 2020 is less than her $1.6 million.

The “spouse” rule is the same as most government definitions. A person of any gender with whom you are in a relationship…not necessarily in marriage, but in a purely domestic setting.

What other “super” opportunities are there?

Our retirement savings vehicle offers a great strategy to take advantage of when you have a large tax bill or an impending tax bill. That’s even more effective than the above.

Stay tuned for my next column to discover more retirement savings tips.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me. www.nicolessmartmoney.comFollow Nicole Facebook, twitter and Instagram.

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