No one wants to work throughout the year and give all away in taxes. Even though most people are law-abiding citizens and will file their taxes and pay them on time, there are some legal ways through which one can claim some benefits thereby lowering his or her taxable income.
The following points are a few ways you can potentially pay less tax in Australia and make some savings for yourself.
Take advantage of tax deductions:
You can claim tax deductions for expenses that are directly related to your job or business, such as work-related travel, self-education expenses, and tools or equipment required for your job.
Consider salary sacrificing:
You can negotiate with your employer to receive a portion of your salary as benefits, such as superannuation contributions, instead of cash. This can reduce your taxable income and lower the amount of tax you pay.
Maximize your superannuation contributions:
Making additional contributions to your superannuation fund can lower your taxable income and potentially reduce the amount of tax you pay.
Invest in tax-effective investments:
Investing in tax-effective investments, such as managed funds or exchange-traded funds, can reduce the amount of tax you pay on your investment income.
Keep accurate records:
Maintain accurate records of your income and expenses to ensure you’re claiming all eligible tax deductions.
Use tax-effective structures:
Consider using a trust or company structure to manage your investments, as these can provide tax benefits.
Claim tax offsets:
Look into tax offsets, such as the low-income tax offset, to reduce the amount of tax you pay.
Consider negative gearing:
Negative gearing can be used to offset investment losses against your taxable income.
Make contributions to a spouse’s superannuation:
You may be able to receive a tax offset for contributions made to your spouse’s superannuation account.
Use carry-forward losses:
If you have incurred a loss in a previous year, you may be able to use it to offset taxable income in a future year.
Note: It’s important to check your individual circumstances and seek professional advice to ensure you’re paying the correct amount of tax and taking advantage of any tax-saving opportunities available to you.