How I Get $13k Tax Return for 23/24 FY
Ever wondered how some people manage to get huge tax returns? I'm about to share how I transformed my financial strategy and ended up with an almost $13,000 tax return, all while increasing my income. Sounds too good to be true? Let me break it down for you.
The Secret Sauce: Smart Debt and Superannuation Strategies
Debt Recycling: I converted $400,000 of my home loan into an investment loan. At 6% interest, this created a $21,000 tax deduction. How? The interest on loans used for investments is tax-deductible.
Superannuation Contributions: I maxed out my concessional contributions cap and used catch-up contributions. This allowed me to claim a $30,700 deduction. Remember, super contributions can significantly reduce your taxable income.
Additional Deductions, Losses & Discounts I claimed:
50% CGT Discount for assets held more than 12 months - $16,000
Carried forward losses from previous years - $9,000
WFH & other work-related expenses - $1800
Income protection insurance - $1500
Investment-related books - $100
Cost of managing tax affairs (tax accountant) - $890
Franking tax credits from share investments - $1900
The result? Despite earning an extra $45,000 on top of my salary from dividends and selling shares last financial year, I didn't need to pay additional taxes for them. My deductions offset the extra income, resulting in a substantial tax return. The simplified calculations are shown below:
Note: I’m really simplifying this calculation here and have left out quite a few background details. But the point is to give you an idea of how a tax return is calculated so you can get a better understanding of your own strategy. The numbers might look different for everyone, but the principles stay the same!
Key Takeaways:
Understanding tax deductions is just the start. Implementing a comprehensive strategy is where the magic happens.
Seemingly counterintuitive moves, like taking an investment debt or contributing more to super, can lead to significant tax benefits.
Professional advice from a tax accountant and financial advisor can be invaluable in crafting a personalised strategy.
Remember, everyone's financial situation is unique. What worked for me might not be the best approach for you. However, this glimpse into my tax strategy shows that with careful planning and expert advice, you can potentially transform your financial outlook.
Want to learn more about how you can optimise your taxes and investments? Stay tuned for more insights on smart money management and wealth-building strategies.