How To Save Tax In Australia
Every year, thousands of Australian taxpayers pay more tax to the ATO than they need to. Fortunately, there are several simple ways you can ensure that you’re not overpaying tax each year. Here’s our guide directed at Australian small businesses and workers on how to save tax in Australia.
How Do I Save Tax?
First, it’s important to clarify that there is no way to avoid paying tax altogether. This guide is to show you the legal ways you can save on tax and only pay the base amount that you actually owe. By ensuring you are claiming every deduction possible while taking advantage of offsets and incentives, you could legally save hundreds on tax every year.
How To Save Income Tax In Australia
You’ve probably heard of salary sacrificing when it comes to superannuation, but did you know that you can also use salary sacrificing to pay off certain essentials? From new cars and tech to insurance, rent, mortgage and other payments, you may be able to receive benefits while reducing your taxable income.
Keep Records & Claim All Deductions
The best way to ensure you’re paying the right amount of tax is to have a thorough understanding of your expenses and claim all possible deductions. Keep records of anything you spend on that relates to your work and make claims for even the smallest expenses. They can add up by the end of the year and keeping accurate records ensures that you can prove every claim to the ATO.
Get Private Health Insurance
If you earn over a certain amount each year, it can be more affordable to invest in private health insurance. The Medicare Levy Surcharge can cost more than some private health insurance plans. This means that you could pay less overall while getting better cover when you go private, depending on your annual income.
You could be paying too much tax simply because you’re paying tax on income that is non-taxable. Income from certain pensions, grants, government payments and allowances, education payments, scholarships, and lump-sum payments from insurance policies may be considered non-taxable. Leaving them out of your tax return could significantly reduce your overall taxable income.
File Your Tax Return On Time
One of the easiest ways to save on tax is to ensure you lodge your tax return by the ATO deadline. For most Australians paying income tax, this will be on the 31st of October. Filing before this date will ensure that you don’t get hit with costly penalties that are completely avoidable.
Business Tax Savings Australia
When it comes to saving on tax for both small and large businesses, there are many things you can do that will depend on the size and set-up of your business. From deferring your income to claiming asset depreciation or a small business tax offset, there are likely ways that you could reduce your tax right now without even factoring in the incentives that could be available.
The best way to ensure you only pay the tax you owe and take advantage of any incentives that you may qualify for is to consult an expert. Our financial team can advise you in on how to save tax in Australia based on your specific circumstances.
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