Preparing for Graduation

Author:
By James Court
B.Bus
Tax Consultant, AMA Financial Services Pty Ltd

The transition from medical student to intern can be a busy time as you prepare for the challenges that lie ahead.

With this, a number of financial terms will be spoken about and often misunderstood. What is salary packaging? What expenses can I claim as a tax deduction? Why am I being told to consider income protection insurance?

Here is a brief summary of these financial issues you will face over the next few years.

Salary packaging

By using pre tax income to pay for day to day living expenses, salary packaging will reduce the income you have to pay tax on. It’s important that you read all your documents carefully to find out what you can and can’t package at your particular hospital.

Taxation

An income tax return is a summary of how much income you earned, and of the expenses you incurred to derive that income. A tax deduction reduces the income on which you have to pay tax.

Tax deductions are work related expenses such as professional subscriptions and memberships, training fees and medical books and journals, etc. You need to keep a receipt for of all these expenditures.

Income protection insurance

Your ability to produce income is your best asset.

Income protection insurance is designed to help protect your income if you are disabled by illness or accident.

It can provide cover to replace up to around 75 per cent of your income if you are unable to work.

Subject to the policy conditions, in the event of a claim, after a specified waiting period (say 30 days) it will pay you a regular income for the period of time it takes to return to work or if unable to return to work, until up to age 65 (if you have selected this benefit period).

Disclaimer:
This information is provided as a general guide only. For information and advice relating to your financial planning and investment requirements as it pertains to your specific circumstances, you should speak to your financial advisor or contact AMA Victoria Financial Services on (03) 9696 8844. AMA Victoria Financial Services Pty Ltd is an authorised representative of Doquile Perrett Meade Financial Services Ltd (ABN 060 159 917), AFSL 239690. You should not affect any financial product without obtaining and reviewing a current Product Disclosure Statement (PDS). You would need to complete an application which is included in the Product Disclosure Statement.