No one wants to pay tax, it is a long and tedious process that we would rather do without. However, it is a legal requirement that we must adhere to. The good thing is that there are plenty of ways that we can save on income tax in Australia, here are some of them.
1. Organise your tax records
For your income tax deduction claims it is essential that you have all of your receipts. It is a legal requirement to keep track of your receipts but it is also the best way for you to keep a record of everything that you intend on making a claim for.
Every year thousands of people miss out on claiming all of their deductions because they didn’t keep a good record of their receipts. If you want to claim everything that you are entitled to, you are going to have to be extremely organised.
Record keeping does not need to be difficult. Take 15 minutes every week and update your log books, download statements and arrange all of your receipts into a file. This will save you plenty of time and stress at the end of the financial year.
2. Seek professional tax advice
You might not want to spend the extra money, but hiring a certified tax professional will save you much more than you will spend. This is what they have been trained to do, there is certain information that they will have access to that you won’t. According to ATO statistics 70% of Australians use the services of a tax agent.
3. Be generous
Every donation over $2 that you make to a registered charity is income tax deductible. It is always commendable to give to charity. What makes this gift even better is that you can claim the amount that you donate back on your tax return. Once you have made your donation, you will receive a receipt; make sure you add it to your tax records.
4. Claim what you are entitled to claim
Thousands of dollars of income taxes go unclaimed each year because people are not sure what they are entitled to claim. If you purchase something that you use for work and home, you might be able to claim on the portion that you use for work. Also, if you have any out of pocket expenses for work related items make sure that you find out if you can claim for it. If you are unsure, keep your receipts and ask your accountant.
Also don’t forget to check out our video about income tax in our tools section!