Seven Australian Tax Planning Tips

Posted on Dec 16, 2013 | 0 comments

Once the Australian tax season approaches, everyone is worried about paying taxes. But lets be frank, if you are earning an income in Australia, you will inevitably have to pay tax. That doesn’t mean you must over pay or pay anything more than what you are earning. It is never too late for some effective tax planning tips. Tax avoidance and tax minimisation are two completely different things, and most people seem to confuse the two terms. Tax minimisation is completely legitimate, and it is an arrangement where a person would develop strategies to minimise the tax amount paid to the government. This article will highlight 7 tips that would help the Australian citizen to plan his or her tax strategy effectively.

1. Calculate Your Total Income for the Current Financial Year – Calculate all the income for the year such as wages, business income, investments, bank interests etc. An effective way to save taxes for the current year is to defer your income or bring forward any deductions. This should be done by the 30th of June of the financial year.

2. Keep a Track on All of Your Work Related Deductions – It will not be easy to keep track of all work related deductions. But doing so can help to save a considerable amount of money because work related expenses are deductible from tax. One easy way is to pay all your work related expenses through a single credit card or bank account. Some of the expenses include uniforms, telephone and mobile costs, laundry and union fees.

3. Non Work Related Deductions – The fees paid to a registered tax agent to prepare or manage your tax affairs are deductible. Bank charges and interest payment on funds are also deductible.

4. Income Protection Insurance – This can be claimed as a work related expense.

5. Capital Losses – Any capital loss can be offset against any current capital gains, or it can be carried forward to be offset against any future capital gain.

6. Expenses and Interest Paid on Investment Property – Rental property owners are allowed to generally claim deductions for advertising, corporate fees, bank charges, council rates, cleaning, gardening, insurance and land tax etc.

7. Log Book of Your Vehicle – If you are using your car for work, maintain a log book and keep track of all expenses for that particular year. You will be allowed to claim these expenses other than the expenses between your home and the office. Also penalties and fines cannot be claimed.

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