While you are running a company in Australia, it is most likely to come with plenty of liabilities as you need to pay various taxes types. Paying taxes within a given deadline is one of the biggest liabilities for your company, and it might take a major amount from your company’s income. But you don’t need to stress as there are some of the most effective ways to minimize your tax liabilities in Australia.
Here are some strategies to save minimum on tax liabilities
Salary Sacrificing-
It is one of the most effective ways to minimize your taxable income in the country. Salary sacrificing is also termed salary packaging, which works in unique ways, and some common sacrifice perks include superannuation and motor vehicles. For instance, the same can be used for paying for a new computer, mortgage payments, car insurance, and other perks, which are termed fringe perks. Using this method, Australians tend to save thousands of dollars every year.
Keep All the Tax Records Perfectly-
You need to show some records for tax deduction claims when inquired by the Australian Taxation Office. It can be challenging for your company if you fail to have a proper tax filing system. Some companies miss out on tax deductions due to this ignorance part. Several people even wonder do they need to keep track of all the deductions which their companies incur, but the process is challenging, and dedicating some time can keep your records updated. You need to ensure that all the receipts are perfectly organized, accessed in any filing cabinet, and this will save you a lot of time. Several tax accountants can help you keep up your tax records accurately.
Claim Various Deductions-
You can claim the money if any money is likely to be spent on buying anything related to your company, and you need to ensure that you declare the tax deductions that will help you pay minimum tax under ATO guidelines. Several things might seem negligible but ideally can lead to maximum savings at the end of the year. For instance, if you buy something for your company and use it all by yourself, then also you can claim the deduction for time you would have spent on the company-related work. You need to keep a receipt and request a tax expert to file the taxes on your behalf if you are confused about having a claim on a specific purchase as any business-related tax deduction.
Donating to a Registered Charitable Trust Can Be a Perk-
Every penny you are likely to donate to an authorized charitable trust will be considered as some tax-deductible. Once you make the donation, the trust will send you a receipt. When the tax filing season is around the corner, you can include this receipt, and you need to remember that you will not get any refund; instead, the money would be deducted from your income that is taxable.
Integrating Super Fund Can Minimize Tax-
Several tax experts will suggest contributing to you or your loved one’s super fund if you tend to ask any tax professionals about how to pay minimum taxes in Australia. The tax rate for any concessional super contributions is around 15% in Australia. Personal deductible contributions and salary sacrificing are some of the most common types of concessional contributions. There is no limit on the tax amount on salary sacrifices. You can easily contribute to the superannuation fund even if you are a self-employed taxpayer.
Minimum Capital Gains-
It is most likely to be subject to capital gains tax if you tend to sell any significant business assets in any financial year. A 50% capital gains tax is applicable if you hold the asset for at least a year. Besides marginal tax, these taxes need to be paid in the year the asset is likely to be sold. You can save considerable taxes if you repay the vital expenses on these investments at least one year in advance.
Prepaid Expenses-
You can minimize your taxable income when you pay some income-related expenses. You can also move deductions to the next financial year, which will ensure a better tax refund. But you need to know that all the prepaid expenses must be less than one thousand dollars or align with the 12-month rule.
Claiming deductions is one of the best perks you can enjoy while earning in Australia. You can save a maximum amount on your taxable income by having a private health insurance. Australia’s health insurance scheme is Medicare, and it should be at least a 1% Medicare levy surcharge. If you are unmarried and earn 90000 dollars a year, then you cannot hold private hospital insurance. Hence these are some tips to save maximum liabilities connect for the best accounting & bookkeeping services in Perth