Tax Tips for IT Professionals

Our 24 May 2024 webinar titled "Mastering Your Money," presented by Vicki Gardiner and Harry Hoang, the CEO of Tailored Accounts, and an ACS Member provided valuable financial advice tailored for tech professionals as they approach the end of the financial year. 

The session focused on practical tips for tax savings and financial management, with insights specifically beneficial for those in the technology sector.

Importance of Financial Planning for IT Professionals

The webinar emphasised the significance of financial planning, particularly as the end of the financial year approaches. Many professionals, often working as consultants, face unique financial challenges and opportunities. Proper financial planning can lead to substantial tax savings and better financial health.

Salary Sacrifice: A Simple Yet Underutilised Tool

One of the standout tips from the session was the use of salary sacrifice for purchasing essential work tools like mobile phones, laptops, and tablets. By utilising salary sacrifice, professionals can purchase one unit of each per year, converting these purchases into tax-free items. This strategy not only reduces the taxable income but also leads to significant savings. For instance, a $1,000 phone could result in savings ranging from $325 to $900 depending on the individual's income level.

Harry also provided as free template for you to manage your own finance

1. Click the hyper link to download a copy of Business Intelligence System (BIS) and Tax saving & tips templates for Harry Hoang’s demonstration.

Maximising Superannuation Contributions

Harry highlighted the benefits of maximising superannuation contributions through salary sacrifice. Contributing extra funds to superannuation before the financial year ends can lead to substantial tax savings, as super contributions are taxed at a lower rate of 15% compared to higher marginal tax rates. This strategy is particularly beneficial for high-income earners. For example, contributing an extra $10,000 to superannuation could save an individual up to 30% in taxes.

Utilising Unused Contribution Caps

A notable insight was the ability to utilise unused superannuation contribution caps from the past five years. This provision allows individuals to contribute additional funds to their superannuation in a financially advantageous year, potentially leading to significant tax savings. This flexibility is especially useful for those who have not maximised their contributions in previous years.

The Timing of Contributions

The webinar also stressed the importance of timing when making superannuation contributions. To ensure that contributions are processed before the financial year ends, it is crucial to plan and communicate with payroll departments well in advance. Waiting until the last days of June could result in missed opportunities due to processing delays.

Encouraging a Habit of Savings

Harry encouraged even low-income earners and those new to the workforce to develop a habit of contributing to their superannuation regularly. Starting with small amounts can lead to significant savings over time, thanks to the compounding growth within the superannuation fund.

ACS Membership: Tax Benefits and Professional Indemnity Insurance

Another significant point covered in the webinar was the benefits of ACS membership, which include professional indemnity insurance and tax-deductible membership fees.

Professional Indemnity Insurance: As part of the ACS membership, tech professionals receive coverage for professional indemnity insurance. This benefit can provide peace of mind and financial protection against potential claims arising from your business.

Tax-Deductible Membership: ACS membership fees are tax-deductible, offering another avenue for tax savings. By claiming these fees as a deduction, members can reduce their taxable income and potentially lower their tax liability.

Action Step: If you're not already a member, consider joining ACS, a tech community of 47000+ tech professionals to take advantage of these benefits. If you're already a member, ensure you claim your membership fees as a tax deduction.

Conclusion

The "Mastering Your Money" webinar provided tech professionals with actionable financial tips to enhance their financial health and achieve tax savings. By leveraging salary sacrifice, maximising superannuation contributions, and planning ahead, individuals can make informed financial decisions that benefit them in the long run. The key takeaway is the importance of proactive financial planning, especially as the financial year draws to a close.

Watch the full recording of the event here. 

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