For most younger Australians, tax planning and considering tax minimisation occur a month or two before the June 30th deadline. As we prepare this article, many of you aged between 25 and 40 have just finished your latest tax returns, and thinking about it again so soon feels a little odd. However, starting now with planning and leveraging the guidance from a professional financial planner, you give yourself a significant head start and an excellent opportunity to keep more and accelerate your savings and investments.
Why start now?
It is a fair question and one that many younger clients ask. The fact is, tax planning isn’t about minimising how much you pay to the ATO. It is about making strategic choices and establishing a framework that enables you to spread contributions and expenses across the year instead of scrambling as tax time gets closer. It empowers you to use compounding growth and cement your savings and investment routine well ahead of the Christmas silly season.
Think about your superannuation. It is one of the most tax-effective investment platforms available. You can contribute $30,000 from July 1st, 2025, to June 30th, 2026, including employer contributions, taxed at 15%, likely to be half the marginal tax rate of 32.5% or higher than you are paying now.
If you haven’t used the full cap in the past five years and your super balance is under $500,000, you may be able to use the carry-forward rule to contribute more and claim a bigger deduction.
If salary sacrifice isn’t an option, you can still make a lump-sum contribution to super and claim a tax deduction. For example, putting $3,000 into your super fund before 30 June 2026 could reduce your taxable income by the same amount. This strategy is beneficial if you receive a bonus.
Now is the time to review your investment structures and insurance
If you’ve started investing, there are strategies to reduce your tax liability:
- Negative gearing: If rental property expenses exceed rental income, you may be able to deduct the loss against your other income.
- Investment expenses: Brokerage fees, financial advice, and interest on loans used for investing may be deductible.
- Capital gains timing: You must hold assets for over 12 months to qualify for the 50% CGT discount. If you’re considering selling, plan the timing carefully around income levels.
Depending on your income, you may be subject to the Medicare Levy Surcharge if you don’t have private hospital cover. Singles earning over $97,000 or couples earning over $194,000 can save taxes by taking out appropriate hospital insurance. Also, don’t forget about your genuine charitable donations. Donations of $2 or more to registered charities are tax-deductible.
Reducing taxable income before June 2026 isn’t about outsmarting the system. It’s about making strategic choices that begin a foundation for long-term wealth.
Tools like super contributions, investing, and professional financial planning can make your money work harder. The sooner you act, the more reward you will see. If you haven’t thought about a financial plan or don’t know where to start, our team is here to help. Take control of your money and make it work for you.
We can help
Step Up Financial Group, now AFPG, has the expertise to guide you with professional, tailored financial planning strategies. We work with younger Australians to create bespoke financial plans that are achievable and flexible.
Contact us today for experienced, compassionate, and professional financial planning advice.