We recently sat down with Matt Harris, to discuss smart tax strategies that can help Kiwis save money. At Lighthouse Financial, we know that paying taxes is inevitable, but overpaying isn’t. That’s why we’re here to share five essential tax hacks to help you keep more of your hard-earned money in your pocket. Here’s what you need to know to optimise your tax strategy.
We recently sat down with Matt Harris, to discuss smart tax strategies that can help Kiwis save money. At Lighthouse Financial, we know that paying taxes is inevitable, but overpaying isn’t. That’s why we’re here to share five essential tax hacks to help you keep more of your hard-earned money in your pocket. Here’s what you need to know to optimise your tax strategy.
Depreciation allows you to claim a tax deduction on assets that lose value over time, such as property chattels. Items like carpets, window coverings, and dishwashers can be depreciated, reducing your taxable income. To maximise this benefit, consider getting a chattels valuation. A professional valuer will assess all depreciable items in your property, ensuring you claim the full deduction available.
If you own a rental property or run a business, you may be eligible to claim vehicle-related expenses. Whether you’re driving to inspect properties or meet with clients, tracking mileage can lead to significant deductions. The current mileage rate is around $1 per kilometer—so if you drive 200 km to a rental property five times a year, that’s a $1,000 deduction! Small savings like these add up quickly.
If you work from home, even partially, you may be able to claim a portion of household expenses like rent, mortgage interest, power, and internet. The key is to allocate a reasonable percentage of your home that is exclusively used for business. For instance, if your office makes up 10% of your home, you can claim 10% of your eligible expenses. Keeping good records is crucial to maximizing this deduction while staying compliant.
Did you know that certain insurance policies, like income protection insurance, may be tax-deductible? If your policy covers loss of income due to illness or injury, the premiums can often be claimed as an expense. This not only provides financial security but also offers a tax advantage. Just ensure you choose the right type of policy—some are deductible, while others aren’t.
How you structure your investments and businesses can have a major impact on your tax bill. Whether it’s a trust, company, look-through company, or limited partnership, the right setup can lead to substantial tax savings. For example, if you earn $200,000 annually, structuring your investments correctly could save you up to $2,000 per year in taxes. Reviewing your structure with a tax professional can help you find the most efficient way to manage your income and expenses.
The best way to ensure you claim all possible deductions is to keep detailed financial records. Good bookkeeping makes tax time smoother and helps maximise deductions. Invest in a reliable accounting system or work with a tax professional to ensure nothing is overlooked.
Depreciation deductions can help lower your taxable income—get a chattels valuation to maximize claims.
Vehicle expenses like mileage for rental property visits can be deductible.
Home office expenses allow you to claim a percentage of your rent, mortgage interest, and utilities.
Personal insurance premiums for income protection may be tax-deductible.
Using the right business structure can result in substantial tax savings.
Good record-keeping is essential to ensure you claim all possible deductions.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
