I am having a baby in December and intend to stop work on a full-time basis. Is there anything that I should do tax-wise to maximise our position?
This is one of the most common questions that we get asked. There are a few simple strategies for you to follow and they all largely revolve around the marginal tax rates for yourself and your husband, both now and in the future. Firstly, ensure that all investments are in your name so that you can take advantage of your lower tax rate (particularly the first $6,000 which is tax free) on any investment income derived. Likewise, have all passive deductions such as charitable donations in your husband’s name as he may get a return of up to 46.5% pending his income level. If you want to sell some of your investments which have made a gain, then you might want to defer the sale til after 1 July next year when your tax rate would be lower, although you need to hope that the value of the investments don’t fall before then. With you only working a part year, yet paying tax based on a full year, I would expect that you will get a nice tax refund for the 2008/09 financial year. So put in your t
