Yahoo Finance Tax 'secret' ATO doesn't want you to know: 'Must do before June 30'
Financial advisor Ben Nash said changes are coming to income tax in Australia next financial year.
As we edge closer to tax time, a financial advisor has sounded the alarm on a "secret" deductions hack that you won't be able to utilise next financial year. With the cost of living crisis plaguing many Australians, people are looking at ways they can reduce their taxable income or get as many deductions as possible.
That's where financial advisor Ben Nash comes in. He said there are changes coming into effect on July 1 and it's best to jump on them before they are gone.
"I'm gonna let you in on a little secret that the ATO (Australian Taxation Office) probably doesn't want you to know," he said.
Do you have another legal ATO hack? Email stew.perrie@yahooinc.com
He insisted that this is just a general PSA and if people are keen to have a look into this then they should consult a financial advisor to see how to best approach the hack.
Individual income tax rates will be changing at the beginning of the new financial year and it will be good news for some and bad news for others.
From July 1, a person earning an average wage of $73,000 will get a tax cut of more than $1,500 a year. Those earning $50,000 will pocket an extra $929 a year, while people on $100,000 will receive $2,100. Households on an average income of $130,000 will receive $2,600.
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While high-income earners will also get a tax cut, it won't be as much as initially expected.
For those earning $200,000, the tax cut will be slashed from $9,075 to $4,500.
The federal government is also reducing the 19 per cent tax rate to 16 per cent and the 32.5 per cent tax rate to 30 per cent.
Nash said there is now a "small window of opportunity" for people to utilise.
"Where before June 30, your deductions are going to be worth more in this [financial] year than they ever will be again, that means that there's an opportunity to save tax, which is going to be gone in just a few months," he said.
"So basically because the tax rates are reducing from next year, that means that for the rest of this financial year, tax rates are a little bit higher. That means the value of every single dollar of tax deductions is going to be more before 30 June than it will be from July 1.
"So if you want to maximise your tax savings, you need to be on the ball with your tax planning."
He warned that once this window is closed it "will be closed for good". He urged Aussies to do their homework and discover what they can legally claim and see if they can bring any deductions forward into this financial year.
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