No-one wants to pay more tax than they absolutely have to yet all too often I see people paying unnecessary tax that could have been quickly, easily and legitimately reduced. Here are 9 simple tips to ensure you don’t pay any more tax than you need to.
- If you have an investment property and it’s under 40 years old make sure you get a quantity surveyor’s report so you can claim depreciation on the building and the fixtures. They cost about $400 to get and even the report itself is tax deductible.
- In a 2 income family have the higher earner pay any tax deductible donations and claim it on their tax return.
- If you’re hopeless with keeping receipts pay for everything with your credit card. Lost receipts for expenses paid by cash are lost tax deductions.
- If you use your car for work make sure you keep a logbook. Keeping a logbook gives you more options when it comes to claiming your motor vehicle tax deductions.
- Pay off non-tax deductible debt first. If you’ve got an investment property as well as other debt it makes sense to have an interest only loan for your investment property and pay off your other debt first.
- If you own shares hold on to them for at least 12 months so you are eligible to get the 50% capital gain tax deductions.
- Salary sacrifice superannuation from your wages. Not only will you reduce the tax you are paying but you are boosting your retirement nest egg.
- A common and often costly oversight is unnecessarily paying the Medicare Levy Surcharge (MLS). if you and If you’re an individual and earn more than $88,000 or a family who earns more than $176,000 and you don’t have private health insurance the MLS is another 1% imposed on top of the 1.5% Medicare levy. My tip is get the insurance, get the tax benefit and get the hospital benefits – it’s a win/win.
- And finally get yourself a good accountant. A good accountant will ensure you are claiming everything you are entitled to and as an added bonus you can claim their fee and travel to and from their office as a tax deduction.