I have been asked numerous times “what can I do to lower my tax bill”. There are various ways to do this, but it ultimately comes down to educating yourself in this area. Lowering your tax bill can be achieved through various strategies that are legal and compliant with tax laws. Here are some tips to help you reduce your tax bill:
Maximise deductions: Ensure that you claim all tax deductions that you are eligible for. For individuals, this includes work-related expenses such as uniforms, travel, and home office expenses. The ATO has occupation specific guides available that can help in identifying allowable tax deductions.
Make superannuation contributions: Making additional superannuation contributions is a tax-effective way to reduce taxable income. For individuals, this can be done by making personal contributions before the end of the financial year, and claiming a deduction for the additional contributions. For businesses, this includes making contributions for employees before 30 June each year.
Review investments: Review investments before the end of the financial year to determine whether they should be sold or held onto. Selling investments that have incurred a loss can be a tax-effective way to reduce taxable income and offset any realised capital gains. Also consider deferring the sale of assets with any gains, until the next financial year if possible. This can help to reduce taxable income in the current financial year.
Salary sacrifice: Consider salary sacrificing into superannuation or other eligible benefits such as a car, laptop, or phone. This can reduce your taxable income and increase your take-home pay.
Charitable donations: Charitable donations can be tax-deductible and can help reduce taxable income.
It is important to note that tax laws and regulations are subject to change, and it is recommended to seek professional advice from a qualified tax professional to ensure compliance with all applicable tax laws.
