YES! There are ways to minimize your tax liability.
Here are some tips:
- Take Advantage of Tax Deductions and Credits: Be sure to claim all the deductions and credits you are eligible for, such as charitable donations, mortgage interest, education expenses, and retirement contributions.
- Use Salary Sacrificing: With salary sacrificing, a taxpayer would put some of their pre-tax income toward a benefit before they are taxed. Some of the most common salary sacrifice benefits are motor vehicles and superannuation.
- Maximize Your Retirement Contributions: Contributions to a retirement plan can help you reduce your taxable income. Consider contributing extra to your super fund.
- Keep accurate Tax and Financial Records: Dedicate few minutes of your time each week to bank statements. Update your logbook and make an expense list. It will make it easier for you to remember what you can claim.
- Get Private Health Insurance: If you don’t carry private hospital insurance, but you’re single and make more than 90,000 dollars a year, or you’re a family and make more than 180,000 dollars per year, you will pay a minimum one percent Medicare Levy Surcharge.
- Timing of Income and Expenses: Consider the timing of your income and expenses. For example, if you expect your income to be higher next year, consider deferring some of your income until the next year.
- Start a Business: Starting a business can provide opportunities to reduce your tax liability. Business expenses such as rent, office supplies, and travel expenses can be deducted from your taxable income.
- Use Tax Offsets: Tax offsets can reduce your taxable income if you meet certain eligibility requirements.
- Hire a Tax Professional: A tax professional can help you identify legal ways to minimize your tax liability and ensure that you are taking advantage of all the available tax benefits.
It is important to note that avoiding taxes illegally can result in serious legal consequences, including fines and imprisonment. It is always best to seek professional advice and follow the law.
So, these are the ways to minimise your tax liability, if you would like to discuss further please feel free to make an appointment with our tax planner at the TAXATION.