If you wish to minimise your mounting tax bills, you have to do tax planning. You can chalk out a convenient tax strategy to lessen the taxable income. From office-going executives, professionals, traders to business owners, every person can save money by smart tax planning.
You cannot evade tax. Be it income, investments, property, assets, or home loans, tax payment will coincide with all your financial decisions. Undertaking a personal tax plan while considering all these aspects can help you come up with a good one.
Let us explore some win-win tax strategies:
- Investment – Long-term financial investment plans can work better, which includes borrowing money from banks to buy property, stocks, or businesses.
- Restructure – You can restructure your property and other investment loans so that they come under the tax-deductible debt category, to be paid faster.
- Property Trusts – Transfer your assets into family-owned property trusts or companies. Managing these super funds in this way can minimise your taxable income
- Salary Package – Try to increase your take-home pay by including car lease and superannuation in your salary package.
- Online Help – You could visit reliable sites offering business tax calculator for free
Simple yet legal tax-saving tricks also include speaking to a professional tax accountant and taking his valuable opinion to go about saving tax money. You may cash in when you sell an asset and make capital gains related to tax discounts. Most often, discounts are offered to trusts and superannuation funding, and you can benefit from that.
You can start a company, which is considered a separate legal entity. Such companies may attract lower tax rates as compared to individuals. Creating a self-managed super fund or SMSF can be profitable as you can save on fees and investment-related income taxes. Preparing compliance audit reports to evaluate your company’s strength can be seen as a secure risk management procedure.
Negative gearing can cut down your taxable income. It makes up for the losses made when you receive income from your real estate investment, which is less than your maintenance expenses and loan repayments. A well-planned tax strategy can never fail and it can help you get total control of your yearly tax bill so that you do not need to pay more than you should.
Some tax tricks can get you into a lot of trouble. Mixing your private expenditure costs with your business expenses can give disastrous results. Similarly, setting up complex financial arrangements with no apparent commercial purpose can prove to be a bad decision. Some people create a loan that may never be repaid is also a wrong move.
There are numerous tax-avoidance schemes that do not work at all, so you should stay away from making such useless strategies. You may have come across many tax avoidance deals that are advertised to the general public. According to officials from the Australian Taxation Office, some tax schemes are marketed to specific groups of people to exploit them and prey on their social conscience. While there are also tax ventures that target investors handling self-managed super funds. You may approach reputed tax consultants and business advisory services. These professionals could offer specialist taxation advice