Navigating the tax system in Australia can be challenging, but with the right approach, you can maximise your tax savings. Whether you’re an individual or a business owner, these five practical tax tips will help you keep more money in your pocket this financial year.
Both individuals and businesses should maintain thorough and organised records. This includes receipts, invoices, and proof of expenses related to work or business activities. Using a cloud-based accounting system like Xero or MYOB can simplify this process, ensuring you don’t miss out on any deductions at tax time.
For individuals, claiming work-related expenses such as home office costs, vehicle expenses, and tools required for your job can significantly reduce your taxable income. If you’re a business owner, make sure to claim deductions for business travel, marketing, and even depreciation on equipment. Remember to review the ATO guidelines each year as eligible deductions can change.
Contributing more to your superannuation is a great way to reduce your taxable income while preparing for retirement. For both individuals and businesses, making concessional contributions (up to the annual limit) could lead to a lower tax bill. This strategy is particularly useful for high-income earners and business owners.
Businesses can take advantage of the instant asset write-off scheme, allowing immediate deductions on eligible business equipment purchases. This includes vehicles, machinery, and office equipment under the threshold. For 2023-2024, check the specific limit for your business size as it can vary year to year.
For both individuals and businesses, working with an accountant to strategically plan your tax commitments can lead to significant savings. Tax planning involves reviewing your financials ahead of time to take full advantage of available credits, deductions, and offsets before the financial year ends.
By staying informed and working proactively, you can ensure you’re optimising your tax position and keeping more of your hard-earned money.