Want to Pay Less Tax? Here’s What’s Worth It
There’s a moment each year, usually mid-July, when someone looks me dead in the eye and says:
“Surely there’s something I can do to pay less tax?”
And look, I get it.
No one wants to hand over more to the ATO than they have to.
But not all tax strategies are created equal.
Some give you a quick win.
Others take time but pack a punch.
And some just look shiny… but give you very little back.
So I thought I’d share a little something we use behind the scenes, in conjunction with our clients’ accountants:
The Bang-for-Buck Tax Strategy Ladder.
Here’s a simplified version of how we think about tax-saving moves, from easiest to more advanced:
Entry-Level: Tasty Wins for Everyday Aussies
1. Salary Sacrificing to Super
✔️ Simple to set up
✔️ Save tax + boost retirement savings
✔️ Great for PAYG employees
2. Prepaying Expenses
✔️ Think insurance or subscriptions
✔️ Brings next year’s deduction into this year
✔️ Only works if you itemise and time it right
3. Maximising Deductions
✔️ Review your work-related expenses, car logbooks, home office costs
✔️ Often overlooked = often gold
✔️ Speak to an accountant to get clear on your deductions
Mid-Level: Build Wealth + Reduce Tax
4. Investment Property
✔️ Depreciation + interest deductions + running costs
✔️ But watch the cash flow, it’s not always as rosy as it sounds
✔️ Great when aligned with your long-term plan
5. Debt Recycling
✔️ Convert bad (non-deductible) debt into good (deductible) debt
✔️ More advanced, but powerful with the right setup
✔️ Requires good discipline and advice
Advanced Level: Structured for Success
6. Family Trusts & Investment Companies
✔️ More control over income distribution
✔️ Good for high-income earners, business owners, investors
✔️ Comes with complexity, costs, and compliance - don’t DIY this one
7. SMSFs (Self-Managed Super Funds)
✔️ Full control over your super investments
✔️ Tax advantages, especially with property or shares
✔️ Only suits a very specific type of investor
One quote I always come back to at tax time is:
“It’s not how much you make, it’s how much you keep.”
Which strategy is best?
Well, it depends on your goals, income, stage of life, and how much effort you want to put in.
If you’re not sure where to start or feel like you’ve outgrown your current strategy, contact us with “Tax Gameplan” and we’ll help map out what makes sense for you.
And yes, we’ll loop your accountant in too, so we can tackle this as a team.
Or forward this to your friend who’s always bragging about their refund... but still doesn’t have a plan.
P.S. Most people do their tax planning after June 30.
But the smart ones? They get ahead of it now.
And their future selves high-five them every year.
7Wealth Pty Ltd ABN 44609210246 is a Corporate Authorised Representatives and is authorised through Cobalt Advisers Pty Ltd ABN 64 628 654 099 who is an Australian Financial Services Licensee 512550. 7Wealth Pty Ltd is a Credit Representative of Australian Finance Group Ltd ABN 11 066 385 822 (AFG) Australian Credit Licence 389087.
This blog contains information that is general in nature. It does not constitute financial or taxation advice. The information does not take into account your objectives, needs and circumstances. We recommend that you obtain investment and taxation advice specific to your investment objectives, financial situation and particular needs before making any investment decision or acting on any of the information contained in this document. Subject to law, Cobalt Advisers Pty Ltd nor their directors, employees or authorised representatives, do not give any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of the information contained in this document.
