Taxes are inevitable—if you’re a working individual, you’ll have to pay the government a certain amount of money from your income. There’s nothing you can do about taxes; any reputable accounting firm will tell you that taxes are one of your responsibilities as an adult. Well, you can choose to not pay for your taxes, but you’ll have to face legal consequences for tax evasion.
However, although taxes are mandatory and you’re obligated to pay them, you can do something to ease your burden. If you’ve just been paying the tax amount required of you, then you’ve given the government a substantial amount of free money!
You see, even though the tax is mandated by law, no one ever said anything about being prohibited from cutting your tax bill.
What Is Tax Minimisation?
Tax minimisation refers to the reduction of the amount of tax you pay through legitimate arrangements. Everyone is entitled to minimising their tax liabilities—as long as your methods don’t involve investment schemes, aggressive tax planning arrangements, and the like, you can pay much less tax.
With expert tax planning, you can minimise your tax bill as much as legally possible. Using the tax code to your advantage through clever methods will save you a lot of money, so you’ll have more to spend on your endeavours.
Ways to Reduce Your Taxable Income
It’s never too early to focus on tax planning! The sooner you work with a tax agent to minimise your taxes, the higher your chances of reducing risks and being financially prepared. Getting your finances in order can be overwhelming and time-consuming, but your efforts will be worth it in the end! Eventually, you’ll get to reap the rewards of your hard work!
Just read on below to find out how to pay less tax in Australia:
1. Minimise Capital Gains
By minimising capital gains, you can reduce your tax bill! Capital gains tax refers to the fee you pay on the profit made from assets sold in a given financial year. You can get exempted from Capital Gains Tax if your property is your principal place of residence—as long as you live on the property, you can claim the principal residence exemption.
In addition, your taxes payable within the financial year can be decreased if you prepay the deductible interest.
2. Use Salary Sacrificing
Salary sacrificing is another clever method of minimising your tax bill! Using your pre-tax paycheck to buy goods and services, the tax department will see that you’re earning less, so they’ll tax you with a much smaller amount than before.
Keep in mind that salary sacrificing has its limitations. What you can salary sacrifice will depend on your employer, and you can’t package money you’ve already been paid, so make sure to make your salary sacrificing arrangements in advance.
3. Keep Accurate Records
The Australian Taxation Office (ATO) is strict when it comes to tax deductions. Make sure you keep an accurate record of any items you claim because the ATO could ask you to show receipts for tax deductions claimed.
The ATO will have no choice but to give you your hard-earned money as long as you follow the rules and keep your records.
Not many people will willingly pay taxes, but it is an obligation you have to fulfill. However, with the proper methods, you can reduce or in some cases significantly reduce your tax bill so that you’ll get to keep more of your money! As long as you work with a tax agent with industry expertise on taxes and refunds, you’ll get the largest tax refund that the law allows.
Do you want to minimise your tax liability but don’t know where to start? Then, leave the job to the best tax agents on Sunshine Coast! Our taxation consulting division at Wardle Partners is nationally recognised, and we offer advice based on proven knowledge and experience. Connect with us today!