Top 7 Tips for Lowering Your Tax Burden Down Under

April 17, 2019

Have you ever sat down and thought to about how your income could increase if you could pay less tax? Australians can accomplish this feat by claiming tax deductions to the Australian Tax Office.

Unsure where to begin: Pay less tax in Australia by claiming the following tax deductions:

1. Donate to Charity

If you are a giver, then it is time to get some back. Regular donors in Australia stand a chance to claim gifts or donations as tax deductions if they meet the following:

  • The donation or gift has to be worth $2 or more.
  • The gift or donation has to be a monetary or financial asset.
  • You can provide evidence of the payment, such a receipt confirming the donation.

2. Establish Residency

Nonresidents who visit Australia pay higher taxes compared to citizens and lawful residents. Visiting Australia for more than six months can help you claim Australian residency for tax purposes.

However, you should demonstrate that you’ve settled in only one location during your stay and participated in the local community.

3. Hire a Tax Agent

A tax agent will help you realise and benefit from all possible tax deductions. Claiming all relevant deductions will increase your tax returns significantly.

Tax agents are always up-to-date on any changes regarding tax legislation, so they know every possible deduction for which you qualify.

4. Deduct Medicare Levy

Two per cent of Australian taxpayer’s taxable income contributes to the Medicare scheme.  Some citizens and nonresidents are exempt from paying the Medicare levy.

However, most of these taxpayers still see the levy deducted from their paycheques. Visit the ATO’s office, address your case and claim your tax deduction. A letter can also be sent instead.

Any Australian earning $20,542 or more in a financial year has the right to this benefit.

5. Deduct Car Expenses

Australians who use their personal cars for business can send a letter to the ATO and receive a tax deduction on car expenses. However, car expenses related to commuting to and from work are not deductible.

Some of the vehicle expenses for which Australians can claim tax deductions include:

  • Fuel costs
  • Maintenance Costs
  • Registration costs
  • Insurance Costs
  • Vehicle depreciation

6. Maintain Records

Do not expect to walk into the ATO, ask for tax deductions and receive them right away. Expect to be asked questions. You will be able to answer these questions if you have been keeping track of your deductions and expenses.

Do not rely on your memory to remember expenses you intend to claim as deductions. Instead, keep receipts to make your claim easier. Gather your evidence in a folder so you know how to find everything you need.

7. Deduct Home Office Expenses

Some people work from home even after spending a whole day in the office. For instance, replying to email messages. Others operate their businesses from home or work through a remote connection.

The ATO allows Australian workers to claim tax deductions for using their home computers to work.

Also, self-employed people who work from their houses can claim tax deductions for various uses, including costs incurred to maintain the office location. Consult a tax agent to know exactly what deductions you can claim.


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