Do you need to update your salary sacrifice arrangement?

Salary sacrifice not only boosts your super balance, but it can also reduce your accessable income and therefore, the income tax you pay. By salary sacrificing, you may be able to reduce the total tax you pay and increase your super contributions without impacting your take home pay.

It is important each year that you reassess your salary sacrifice arrangements to ensure you are getting the best benefits available.

Differing circumstances may affect how much you can salary sacrifice. For example, if you have had a pay increase in the last 12 months, it may be beneficial to increase your salary sacrifice contribution, which in turn will minimise your payable income tax.

However, please be aware that the government has now reduced the before-tax contribution limit and if you breach the cap applicable to your age, you may be liable for excess tax.

The annual individual limit on before-tax contributions known as concessional contributions (eg. employer Super guarantee or salary sacrifice) is $25,000. However, if you turn 50 at any time between 1 July 2007 and 30 June 2012, you will be able to contribute up to $50,000 (not indexed) of before-tax money from the financial year you turn 50, until 30 June 2012. After this date, the limit will be $35,000 for everyone.

For the self-employed, this cap applies to personal contributions you make for which you claim a tax deduction.

Over the years, salary sacrifice has proven to be one of the most popular and effective wealth accumulation strategies available in Australia. Conditions do apply and we recommend you discuss this strategy with your financial planner to see if this is suitable for you.

For more information about salary sacrifice, call 1300 55 10 45 or email info@intellichoice.com.au. Alternatively, visit www.intellichoice.com.au for more details.

Tax cuts deliver savings

The third and round of tax cuts from the 2007 election begin this week, which will deliver significant savings to Australian workers. Wage earners on an income of about $59,000 will save $450 in tax this year, or $8.65 per week, compared with last year.

People earning between $55,000 and $60,000 per year will save $1,350 in total, compared with three years ago, while those earning $100,000 will save $500 or $9.62 per week.

Treasurer Wayne Swan said average workers have had their taxes cut by 20% since Labor came to power.

Reduce your tax

It's almost the end of financial year in Australia and we have put together some tips for you to consider to minimise your tax.

http://www.intellichoicefp.com.au/financial-advisor/72-financial-planning-resources/353-reduce-tax-tips-and-tricks.html

You can also speak to a financial planner for more tips on reducing your tax but building wealth at the same time.

Strategies to reduce your tax

The two certainties in life are death and taxes.

We do not have a crystal ball to allow us to see when we are going to die, however we do know when our tax is due. The end of the financial year is 30 June 2010. Unlike death when sometimes you are not prepared, you can prepare yourself for the tax man.

In the 2006–07 income year, individuals had $18.8 billion refunded or otherwise paid out after they lodged their income tax return, and $13.5 billion was required to be paid by other individuals to meet their annual tax liabilities.

Were you one of those individuals who contributed $13.5 billion to the federal government because you were not prepared? Or were you someone who felt you should have received a better or bigger tax refund?

What can you do?

1. Determine now, your anticipated earnings for this financial year – wages, commission, bonus, sale of goods or services.
2. Complete an estimate of your tax liability – understand how much you are going to pay.
3. Assess your long term goals and determine if you are happy to continue contributing to the Australian Taxation Office or would you be better off contributing to your own long term investments. In other words have the tax man pay off your debts.
4. Contact a financial advisor to assist in developing a long term strategy to reduce your tax liability and more importantly to help you create wealth.

Examples of some products that can help you reduce tax and at the same time build wealth include:

• Property investment – tax deductible items include interest on borrowings, council rates, body corporate fees, maintenance, management expenses and depreciation.
• Shares – tax deductible items include interest on borrowings and franking credits
• Managed Funds – tax deductible items include interest on borrowings, deferred income and franking credits.
• Superannuation – salary sacrifice, salary packaging and tax deductions available for self-employed individuals.

For more information about ways to reduce your tax payable, or to book an obligation free appointment with one of our qualified financial planners, call +61 7 3624 1900.

Bank and investor taxes to be slashed

Australia will buck the international trend towards higher taxes on banks and financial institutions and lower financial services taxes under new government proposals unveiled by Minister for Financial Services Chris Bowen on last Friday.


Mr Bowen launched a report into making Australia a regional hub for financial services and increasing the nation’s exports of financial services saying Australia stands out as a safe haven for international investors.

The report recommends the removal of withholding tax on interest income earned by foreign banks in their Australian branches. The report also highlighted that tax law does not allow investors in a unit trust to gain a tax benefit from losses.

Other tax breaks and incentives for fund managers and banks were also suggested by the government commissioned report by former Macquarie Bank CEO Mark Johnson and Treasury officials.

Meanwhile US President Barrack Obama unveiled plans on Friday for a new punitive tax on the US banking system to collect almost $100 billion from institutions to recoup taxpayer money used to bail out banks during the global financial crisis.

Mr Bowen launched a report into making Australia a regional hub for financial services and increasing the nation’s exports of financial services saying Australia stands out as a safe haven for international investors.

The report recommends the removal of withholding tax on interest income earned by foreign banks in their Australian branches. The report also highlighted that tax law does not allow investors in a unit trust to gain a tax benefit from losses.

Other tax breaks and incentives for fund managers and banks were also suggested by the government commissioned report by former Macquarie Bank CEO Mark Johnson and Treasury officials.

Meanwhile US President Barrack Obama unveiled plans on Friday for a new punitive tax on the US banking system to collect almost $100 billion from institutions to recoup taxpayer money used to bail out banks during the global financial crisis.

Sleep better at night with the right financial advice

Do you want financial advice that suits your needs?
Seeking financial advice from a professional financial planner can make a huge difference to your financial future. They can help you make financial decisions to give you peace of mind.

Good advice advice from an experienced, qualified and well-informed financial advisor can help you save money, protect against risk, grow your wealth, reduce tax, plan for retirement, identify entitlements for government benefits and plan what inheritance is to be left for the next generation.

At Intellichoice Financial Planning, our first responsibility is to you. We will take into account your goals and circumstances and recommend an appropriate financial strategy. Any financial strategies we recommend is in your best interests and not based on commission.

Do you want to be worth over a million dollars?
Everyone has some kind of financial goal and it doesn't hurt to aim high. Think about it - what sort of lifestyle do you want in the future? What are your priorities? What do you need to achieve? Start by deciding what you want to achieve and how long it might take to get there and we will sit with you to advise on the best way to attain those goals.

Do you want peace of mind that your famimly is secure, whatever happens?
Unexpected events, like losing your job because of illness or injury, or losing your home in a fire, can have a disastrous impact, which goes far beyond the immediate problem. Your family could be financially ruined, losing the standard of living you've worked so hard to achieve.

Having the right protection will safeguard your financial safety, as well as your family and your assets. If in doubt, speak to one of the financial planners at Intellichoice - we will do all the reserch for you and find a policy that suits your needs.

Do you want to turn the tables on the taxman?
No one likes to pay more tax than they need to and there are a number of strategies you can employ to get the most out of your tax rebate, including super co-contributions, salary sacrificing, investment property and other investment expenses.

There may be even more that may apply based on your specific situation and you should speak to Intellichoice to find out the best ways to manage and reduce your tax payable.

Do you want to feel like there's never a bill you can't pay?
Being able to pay bills without going into more debt is a tough call if you're spending more than you earn - and it's surprising how many people do! The best way to find 'extra' money is to follow a budget. Use the free budgeting calculator for a better understanding on where you can cut down on unnecessary expenses.

For more tips and assistance on budgeting, speak to one of our financial advisors at 1300 55 10 45 or email us directly.

Do you want to retire and live the life you have always dreamed of?
The biggest question most of us ask is - how much money will I need for a comfortable retirement? Naturally, this depends on how long you live and how you want to live.

Deciding how much to keep in super (to save tax and access Government benefits) is part of the equation. But be sure to keep enough for emergencies and day-to-day expenses. The rules are complex and can be expensive for those who get it wrong, so make sure you get professional financial advice.

We have some very unique and innovative cost-effective financial solutions, which means you could effectively pay very little for any financial advice you receive through Intellichoice when compared to industry standard. This gives everyone, regardless of age and income, the chance to achieve financial freedom and live the life you truly deserve.

Financial planning is not reserved just for the rich. Speak to us today to find out how you too can have the opportunity to enjoy financial freedom. If you are keen to find out more, speak to us at 1300 55 10 45 or the financial planning website more details on our services.