streamline your finances

Expat tax tips to streamline your finances in 2021

Tuesday, January 5, 2021 by Shane Macfarlane CA

Streamline your finances – tips for Aussie Expats

For many people, 2020 has been a difficult and challenging year to streamline your finances. Australian expats not only had to deal with their property potentially being harmed in the bushfires back home early in 2020, but also had to face travel restrictions due to the COVID-19 pandemic.

If you are an Australian expat living abroad and are looking for a way to streamline your finances and your tax obligations in 2021, hiring a specialist Australian, expatriate tax firm based overseas may be the answer you are looking for.

Here is how an we can help to streamline your finances whilst you live and work overseas as an Australian expat:

1. Industry expertise

Australian tax laws are prone to frequent change and can be extremely confusing. By hiring an specialist accounting firm, experienced with the complexities of taxes for Australian expats, they won’t need to learn at your time or cost. Instead, specialist expatriate tax firms will stay up-to-date with the latest tax laws ensuring that your taxes are managed and minimised so that you only pay the tax you are obliged to. This means that you do not have to dedicate your time to researching and understanding new laws and requirements (with a high risk of getting things wrong, which could be very costly indeed).

2. Consider contributing to superannuation

Whilst living and working overseas, your superannuation typically stagnates, because your employer no longer contributes superannuation into your fund on your behalf.

You can still grow your retirement savings and retirement income, by choosing to make (voluntarily) contributions into your superannuation fund back home in Australia notwithstanding that you may be a non-resident at the time.

If you have other taxable income in Australia, you may wish to claim a tax deduction for your superannuation contributed during the year – if so, you’ll need to make a concessional contribution (maximum contribution is capped at $25,000 per person per year), and you’ll need to notify your fund of your intention to claim a tax deduction. This strategy assists to streamline your finances as it reduces your overall Australian tax liability, and it assists to grow your superannuation fund whilst you’re overseas.

If you don’t have any income to offset with a superannuation deduction, you can make a non-concessional contribution (i.e. non-tax deductible contribution) into your fund of up to $100,000 per year.

If you are currently living abroad but plan to retire in Australia, continuing to contribute to your superannuation will allow you to grow your Australian retirement savings and retirement income in preparation for your ultimate return back to Australia.

If you think that this may be a useful strategy, we highly recommend that you speak with us beforehand or with another suitably qualified expatriate tax firm, so that you carry out this tax-plan successfully.

To read more about this strategy, take a look at a couple of similar articles that we’ve written on this topic below:

3. Streamline your income

As a non-resident of Australia, you will typically only be liable to pay tax on income that is sourced from Australia, such as rent from an Australian property you own, or Australian investment income (interest, dividends, royalties etc that has not had withholding tax deducted by the payer). As such, we recommend seeking advice from your expatriate tax advisor as to how best structure your Australian sourced income tax effectively!

Contact Expat Taxes today

If you are an Australian expat living abroad and you’d like to streamline your finances in 2021, do not hesitate to contact our team at Expat Taxes today.

We are an Australian Chartered Accounting firm that specialise in expatriate tax advice and tax preparation services for clients in over 90 countries around the globe, along with many foreign citizens who live and work in Australia, far from their home countries.

Let us take care of your expat tax obligations for you whilst you enjoy a new life abroad. To learn more about our services, book an appointment with us, or simply contact us today!

Shane Macfarlane CA
Follow me

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.