The best ways to save money when you lodge your tax return online
For the several days E-Lodge has been running a series on the best ways to save time and money when you lodge your return. You can access part one here and part two here. Here for your viewing pleasure is part three:
11. Give your TFN to your employer
12. Claim the tax-free threshold
When you give your employer your TFN, you should also claim the tax-free threshold – unless you already claim it from another employer. The threshold is currently set at $18,200, which means that every Australian resident does not have to pay tax on their first $18,200 of income. Yay! But in order to receive this considerable benefit you have to claim it from your employer. Otherwise taxes will be withheld at too high a rate. If you have multiple employers, you can only claim it from one of them, generally whichever pays you the most.
13. Claim tax offsets
Once you start doing your taxes, the easiest way to save money on your taxes it to claim as many tax offsets as possible. Offsets reduce outright the amount of tax you owe, and are therefore very valuable. If you get an offset for $500, that means you pay $500 less in taxes. Tax offsets generally depend on your situation in life. For example, you may be able to get an offset if you have dependants, if you are a pensioner or senior Australian, if you have income from a superannuation income stream, etc.
14. Defer assessable income
After offsets, the best way to decrease your tax bill is by decreasing your income. You can decrease your taxable income by claiming deductions (more to follow on that) or you can decrease your assessable income, primarily by deferring income to the next financial year. You may be able to do this by delaying the collection of invoices until the next financial year begins or through salary sacrifice schemes. There is a catch, though: you have to have the foresight to do this before the financial year ends and you’ll have to pay tax on this income next year anyway.
15. Deduct general work-related expenses
There are two main types of deductions: general and specific. General deductions are work-related expenses that apply to taxpayers in a large swath of occupations. They include such common expenses as the cost of airport lounge membership, briefcases, calculators, smartphones, and tablets, among many others. Check the list of general deductions to see which apply to you. Remember, you can claim up to $300 without any written proof, so there’s no reason not to take advantage of these deductions. Above $300 you’ll need to justify the expenses with receipts or other written evidence in the event of an audit.
Stay tuned for the fourth, and final, installment coming in the next few days.
Photo via Bonbon on Flickr.