Effective Ways To Overcome Taxable Income In Australia!

February 3, 2021    Tax Return Perth

With the arrival of every financial year in Australia, you need to lodge tax return effectively. However, strategic financial planning can help you lessen your taxing obligations optimally. The sole way of doing it is by learning that how to decrease your taxable income reasonably by implementing proper strategies. It will keep more money in your pocket than ever. Besides, if you are looking up to credit repair and debt consolidation, then, this strategy is perfect for you. By reducing your taxable income strategically, you can clear your potential debts faster than ever.

Three Useful Tips To Reduce Your Taxable Income!

So, what are you waiting for? Start preparing from today to reduce your taxable income to a reasonable extent. If you are a beginner, then, here are three effective taxable income reduction strategies for you to consider.

1. Exclude Your non-taxable Income!

There are certain forms of income that the Australian Taxation Office considers non-taxable or exemptible. So, as a taxpayer, you must not include them while Lodge tax return in Australia. These generally include the following:

  • Round figured payments from mortgage protection or surrender of a substantial insurance policy. Alternatively, it can also be a payment for an injury related to work or a terminal ailment.
  • Potential grants, awards, and scholarships
  • The different types of education payments given by the Australian government. A prominent example includes allowances provided to students who are less than sixteen years old.
  • A couple of potential allowances and payments provided by the Australian government. A notable example includes the allowance related childcare carer and subsidy.
  • A few of the most worthwhile pensions provided by the government of Australia. Examples include pensions provided by Centrelink to those who are less than the age of pension. The disability pensions for those under the age of pension also falls under this category.

If you wish, then, you can reduce the potential taxable income of any of your eligible dependents. Simultaneously, you can also reduce a few forms of non-taxable income of your own.

Read More:- 3 Ways You Can Lodge Company Tax Return Fast

2. Pay Potential Expenses Beforehand!

Make sure you are paying a couple of costs related to your income in advance at continual intervals. If you do so, then, it will diminish your taxable income to a great extent. It happens as a result of the shifting of your potential deductions in the next financial year. However, you must ascertain that all your prepaid costs meet any of the following requirements:

  • They must comply with the rule of twelve month for sure or
  • Each of the expenses should be less than one thousand Australian dollars

As a result, you can expect a much higher refund in return during every taxing year. Basically, the rule of twelve month allows you to claim a deduction in the form of a prepaid cost until it exceeds the duration of twelve months. Subsequently, it will automatically cease in the forthcoming financial year.

3. Reduce Your Taxes With an Offset Account of Mortgage!

A mortgage offset account basically lets you balance your non-deductible home interest effectively. It does so by imposing non-deductible interest on the potential taxable income via a deposit. It lets you make a savings account with your pertinent lender. Subsequently, you will be charged interest on your potential home loan. Then, the amount will be deducted and transferred to your savings accounts. This strategy saves you from the hassle of paying interest on the whole amount of your pertinent home loan.

Get Tax Advice in Perth!

So, lodging your individual tax return with the ATO is not enough! Implement the tips given above or hire a Tax advisor Perth to reduce your taxable income impeccably!

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