Family Tax Benefits

We have started 2007 year end tax planning a lot earlier than usual. The new super rules are great news for doctors and dentists and the touchstone for tax planning is now 15%, being the super fund tax rate, rather than 45% being the top marginal tax rate.

One unexpected by-product of these strategies is the Family Tax Benefits. These benefits are designed to assist families with the cost of raising children. We are finding that many clients are unexpectedly becoming eligible for these benefits as a result of the large deductible super contribution, normally usually gearing. The payments can be more than $5,000 per child, and apply even when mum and dad's combined income is above $120,000. Its a long way from the old child endowment, paid to mum to make sure Dad did not spend it at the pub (along with free bottled mik at school to make sure the kids got some vitamins every day).

You can learn more about Family Tax Benefits, including seeing some worked examples, at www.familyassist.gov.au. This is a very use friendly website and its simplest for us to refer you to it rather than repeat its infomation.

The bottom line is most doctors and dentists with dependant children can qualify for some family tax benefits even if their pre-superannuation combined income is above $200,000 a year.

Thank you John Howard.