There are numerous simple things you can do to save money on taxes and possibly receive a refund from the Australian Taxation Office (ATO). While the tax you pay is decided by your income, you can lower your tax bill by claiming your deductions and taking advantage of tax offsets offered by the government.
Now is the perfect moment to learn how to reduce the amount of money you pay in taxes. Below are different methods you can use to lower your taxes.
Contribute to Your Super
This is perhaps the simplest and fastest approach to paying less tax. Salary sacrificing or salary packaging is when you put a portion of your pre-tax income into your superannuation fund. The most important step here is to be sure you’ve previously done so before being taxed.
As a result, the plan is to forego a portion of your pre-tax income before getting it. When you got through salary sacrificing, you’re swapping your income tax rate for the tax on superannuation payments.
For most people, the latter is smaller, at around 15 per cent. As a result, if you foresee an extra salary at the conclusion of the financial year, you may choose to put that money into your super instead.
Before you receive confirmation of your bonus entitlement, make sure you set up a salary sacrifice with your company. This is important since salary sacrificing only applies to future earnings, not previous earnings.
Keep Your Financial Records Accurate and Organised
You’ve heard it from the ATO before. It’s critical to keep all of your tax records in a secure location. That way, you’ll have easy access to them when you need them, such as for claiming deductions.
This strategy may appear to be simple, but don’t overlook it. When it comes to tax deductions, the ATO has grown more inquisitive than ever. You don’t want to file a claim and discover that you have no proof that you are entitled to the deduction.
It’s quite simple to keep track of your financial paperwork. Simply log your expenses, download statements, and keep all of your receipts in one folder every week for around 10 minutes.
Remember to Claim Your Deductions
Thousands of Australians fail to claim their deductions, allowing them to save money each year. That implies the ATO will receive millions of dollars, which citizens would receive in the form of tax refunds. This is because they do not preserve financial records.
They also believe that their expenses are minor and that they can afford to lose them as deductions. However, once you reach the last days of the financial year, those tiny sums might build up to significant savings. So, whenever you spend money on anything related to your job and how you make money, take advantage of the deductions available to you.
The first step is to make sure you’ve declared all of your deductions, which is critical if you want to pay less tax in Australia.
Donate to Charity
If you’re feeling generous, go with your gut. You’re not only assisting organisations in making the world a better place, but you’re also reducing your tax liability. Every donation you make is tax-deductible–just make sure it complies with the Australian Taxation Office’s requirements.
Don’t forget to add your philanthropic receipts to the “charity donations” part of your tax return during tax season.
Check If Any of Your Income Types Are Non-Taxable
Some types of income have been designated exempt by the ATO, meaning they are not taxable. You should make certain that certain forms of revenue aren’t included in your tax return.
It’s critical that you deduct non-taxable contributions and reduce your dependents’ taxable income. Pensions from the Australian government, such as Centrelink’s disability support pensions for those under the pension age, are instances of non-taxable gains.
There are other government payments and allowances to take note of, such as payments for the federal police or the Australian defence force. It also includes particular prizes, grants, scholarships and government education payments.
Conclusion
Even for those who have been doing their taxes for years, the Australian tax system may be perplexing. That is why you require professional guidance and help.
It’s wise to look for an accounting firm with years of expertise in assisting individuals and businesses in a variety of industries and scales. It also helps if they specialise in tax preparation and business counselling.
If you want to work with the best Gold Coast accountant, M1 Accounting is the firm for you. We specialise in quality tax preparation and business advisory, with over 15 years of experience helping individual and business clients. Contact us today for a consultation.
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