Negosentro.com | 9 ways to save on tax in Australia | A significant part of adult life involves paying taxes. Regardless of where you live or even whether you work or not, you will pay taxes to your government in one form or the other. This is of course an important contribution to the growth of nations, even though taxpayers would certainly love to have the extra coins to spare.
A significant part of adult life involves paying taxes. Regardless of where you live or even whether you work or not, you will pay taxes to your government in one form or the other. This is of course an important contribution to the growth of nations, even though taxpayers would certainly love to have the extra coins to spare.
Australian nationals have a number of avenues they can use to save on the cumulative tax they remit to the Australian Tax Office (ATO). Whereas some of these approaches are well-known to the general public, others require the help of qualified tax advisers. Let’s look into a few ways that you can use to save on tax in Australia.
Track your Tax and Financial Records
One of keeping track of your money generally is to keep track of your financial records. This allows you to find and fix any gaps and losses.
These records become even more important if the Australian Tax Office questions your tax deductions. If you don’t have a proper filing system, you might not be able to make claims and ATO will not be very friendly in paying for the deductions you desire.
One of the easy systems you can use is checking your records on a weekly basis. Set some time aside to download statements and keeping your logbooks updated. They will come in handy when you need them.
Claim Tax Deductions
There are several expenses for which you can claim tax deductions, as long as they are in line with the tax laws. From gifts and donations to clothing and laundry expenses and even home office expenses.
Many people undermine such expenses because they seem too little. However, as little as they may seem, they add up to significant savings at the close of the financial year. Your tax agent may be in a good position to advise you on what is refundable, so keep such receipts safely.
Make Donations to Charitable Organizations
Your cumulative deductible tax from donations may end up being quite a substantial amount by the end of the year. Any amount greater than two dollars that is donated to a registered charity is tax-deductible. The organization is supposed to send you a receipt after donating and you can keep file it safely for the tax season. File that under the “charitable donations” segment in your tax return form. It’s good to bear in mind that such deductions are not refunded but are reduced from the total amount of your taxable income.
Use a mortgage to offset Account
You can accumulate savings with your mortgage lender and use these savings to offset your home loan. These savings will attract tax on the interest earned and it’s therefore wise to put off these savings into home repayment. This will reduce your loan balance and allow you to access extra repayments.
Pay Some Expenses In Advance
Another way of saving on your tax charges is by paying some of your income-related expenses in advance. If you do this, your taxable income deductions are forwarded to the next financial year, effectively giving you a higher tax refund. Such expenses should be less than a thousand dollars and paid within the 12-month period.
Pay Your Taxes On-time
Unless you are registered with a tax agent, all tax returns should be done by October 31. Meeting this deadline helps you to avoid conflicts and penalties. Individuals submit their tax forms online and you can as well track your fillings for the previous year.
Seek Professional Tax Advice
The numbers can be confusing and the process painful. A professional tax agent such as BudgetTax Residential Depreciation will come in handy, helping you to crunch the numbers and offering insider advice on taxation. They will also enlighten you on any tax refunds and guide you through the process without crossing paths with the ATO.
Avoid Including Non-Taxable Income
There are various types of income that aren’t taxable and you need to be aware of them so that they are exempted. Such income may include taxable income your dependents. Such income includes:
Some pensions such as disability support pensions
Government allowances such as childcare or carer allowances
Allowances and payment for overseas duties for Federal Police and Australian Defence personnel various scholarships, grants as well as awards among others.
It’s important to work with a tax agent to keep you on the light and guide you on payments for which you can save a dime.
Keep Your Capital Gains in Check
If you dispose of any assets within a given financial year such as shares or even property, they will be subjected to capital gains tax. Any of these investments that have been held for at least one year will attract a 50% capital gains tax over and above your marginal tax rate. Such taxes may be decreased if you pay the deductible interest beforehand.
On any given investment, expenses can be prepaid for a period of upto twelve months. This allows you to claim any interest on investment loans and management fees in within that particular year.
The tax information in many jurisdictions is a relatively hard subject for the general public. It requires some interest and professional guidance to understand how you can benefit from various tax lawyers in your jurisdiction. It’s also essential to ensure that you are aware of any changes introduced by the government and how they affect your income. Since it is mandatory to remit taxes to the government, proper information becomes the key enlightening factor.