8 Ways To Maximise Your Australian Tax Return in 2024

in this video I'm going to show you eight ways to  legally pay less tax so you can save thousands of   dollars per year with tax time coming up these  tips could help you save a lot of money for this   financial year and help you plan better for next  year let's get straight into it the first way is   the salary sacrifice part of your pre-tax salary  into your superannuation account now if this is   the first time you've heard of salary sacrifice  then it may seem complicated but trust me it's   actually quite simple once you understand how  it works salary sacrifice is when you ask your   employer to make extra contributions into your  super account from your pre-tax salary before you   get paid this allows you to reduce your taxable  income and potentially save on taxes in Australia   your employer must pay 10.5 percent of your  salary into a super retirement account please   note that the super rate is going to increase by  0.5 percent every year until 2026. any extra super   payments that you salary sacrifice are called  concessional contributions which are taxed at   15 in comparison if the money was paid directly to  you without salary sacrificing you would have to   pay your marginal tax rate which is usually much  higher than 15 let me explain this better with an   example Alfred and John earned seventy thousand  dollars per year which is the average full-time   salary in Australia and he wants to know how much  money he can save by salary sacrificing so let's   have a look at the table here with the two options  one is if he didn't salary sacrifice and the other   is if he did salary sacrifice we start off at  70k which is John's before tax salary then we   have our salary sacrifice contribution for one  of our columns please note that concessional   contributions are kept at 27 500 per year which  already includes the 10.5 percent that your   employer must pay into your super so John can pay  an extra twenty thousand one hundred fifty dollars   into Super per year without exceeding the limit  this reduces the taxable income for the year to   49 850 if John did not sorry sacrifice he would  have to pay tax on the 470k and his marginal rate   of 32.5 percent plus two percent Medicare Levy  assuming John would have used the twenty thousand   one hundred fifty dollars to invest outside of  super once you take into account how much extra   tax he has to pay he would say 4181.50 in total  if he's salary sacrificed so you too can do the   same thing as John to save on tax if you are going  to use that money to invest in shares outside of   super then you may as well consider investing  inside super instead and saving on the tax and   at first it may not be much but over the years  the savings on tax will allow you to invest more   with your compound over decades so have a chat  with your payroll officer if you're interested   in salary sacrificing but please note that the  downside is you can only access your super at   preservation age which is currently 60 years old  so if you do salary sacrifice make sure you're   okay with being in it for the long term the next  way to reduce tax is to claim deductions for work   related expenses this means you can claim  deductions on certain work related items or   expenses that you spend during the financial year  to reduce your overall taxable income in Australia   you can claim deductions on certain work-related  expenses that will incur while performing your   job it is important to note that to be eligible  for deductions the expenses must meet a specific   criteria and be directly related to your work  here are some common work-related expenses that   you may be able to claim deductions on one vehicle  expenses if you use your personal vehicle for work   related purposes you may be eligible to claim  deductions for expenses such as fuel repair and   maintenance registration and insurance however you  generally cannot claim the cost of driving between   your home and workplace but you can claim the  cost of driving from your workplace to a client   or work related destination two travel expenses  if you need to travel for work related purposes   you can claim deductions for expenses such as  accommodation meals Transportation EG flights   and taxis and incidental expenses the travel must  be directly related to your job and you will need   to record your expenses with receipts three home  office expenses if you have a dedicated area in   your home use exclusively for work you may be  eligible to claim deductions for home office   expenses this can include a portion of your rent  or mortgage interest utilities internet phone   bills and depreciation of home office equipment  like computers and Furniture four work related   self-education expenses you can claim deductions  for self-education expenses directly related to   your current employment or to maintain or improve  your skills for your job this can include tuition   fees textbooks stationery and travel expenses  for attending educational courses or seminars   five tools and equipment you can claim deductions  for the cost of tools equipment and other work   related assets that you purchase or repair as  part of your employment you can even claim a   deduction on laundry and dry cleaning expenses  for your uniforms six other work related expenses   other work-related expenses that may be eligible  for deductions include professional certificate   patients and licenses work related phone calls  work related subscriptions or Publications and   expenses incurred for income protection insurance  premiums there are a few more expenses you can   claim and I'll leave a link down below to this  article on the ATA website which provides the   full list of what you can potentially claim and  how to claim it I would personally go through   this entire list so you know exactly what you can  claim so even if it doesn't help you this year you   can be strategic about what to buy next year also  please note you can claim up to 300 without any   written evidence or receipts but if you do go over  300 you will need some kind of proof to justify   the deduction a helpful tip would be to download  the ATO app which allows you to take photos of   receipts and documents during the year and save  them directly onto the app that way when it's time   for tax return it's all there waiting for you the  next way to reduce taxes to have a capital gains   tax strategy if you're watching a video like  this then I'm assuming you're an investor or   you're thinking of investing in Australia when you  sell your assets like stocks or real estate for   a profit you must pay capital gains tax however  there are a few strategies you can use to minimize   the tax you pay here are three ways number one  if you hold your assets for more than 12 months   you will receive a capital gains tax discount this  discount will produce the taxable portion of your   capital gains by 50 so for example if you sell  your shares for a profit of 500 you only have to   pay tax on 250 if you waited more than 12 months  to sell so that is a significant saving just by   waiting number two you can offset Capital losses  against capital gains to reduce your overall tax   liability so for example if you made one thousand  dollars profit on stock a and a 500 loss on Stock   B you would only be subject to tax on five hundred  dollars since the loss offset part of the profit   also please note that if you don't have enough  gains to offset your losses you can carry over   the credit to offset any future capital gains  however you cannot use Capital losses to reduce   your taxable income number three consider the  timing of selling assets to strategically manage   your capital gains so for example some investors  sell their stocks that are lost right before July   to lock in the losses for The Current financial  year this is particularly useful if you also made   some gains so they can offset each other so you  might be thinking what's stopping me from selling   a stock at a loss on the 30th of June and buying a  straight back the next day so you can get the tax   benefit while this is called a wash sale and it's  illegal datio does not like investors buying and   selling assets just for the tax benefits and if  you try try this they may audit you so please be   careful the next way to reduce taxes to maximize  deductions for Investment Properties Real Estate   is a tax Haven for investors because besides  the obvious benefits of rental income and asset   appreciation there are so many tax deductions you  can claim so if you own an investment property   ensure you claim all the eligible deductions  this can include expenses related to Property   Management fees repairs and maintenance interest  on loans insurance and Council rates make sure you   keep a detailed record of every receipt invoice  and documents throughout the year so you can   easily produce them when required reducing tax of  real estate in Australia can be achieved through   various strategies however it's important to note  that tax laws and regulations can change so it's   crucial to consult with a tax professional  or refer to the ATO for the most up-to-date   information here are some potential strategies  to consider number one negative gearing negative   gearing involves borrowing money to invest  in property where the expenses EG mortgage   interests or maintenance costs exceed the rental  income the resulting net rental loss can be used   to offset other taxable income reducing your  overall tax liability however it's important   to carefully consider the financial implications  and risks associated with negative gearing number   two capital gains tax discount we've already  mentioned this in the previous tip but if you   hold your investment property for more than 12  months you may be eligible for the capital gains   tax discount this allows you to reduce the taxable  portion of any capital gains realized when selling   the property by 50 number three depreciation  deductions you can claim depreciation deductions   for the wear and tear of certain assets within  the property such as appliances or fixtures so   things like flooring carpets curtains washing  machines fridges and Furniture number four   deductible expenses ensure you claim all eligible  expenses related to your investment property this   can include Property Management fees Insurance  repairs and maintenance Council rates and interest   on loans Yes you heard right you can actually  borrow money and claim a deduction on the interest   if it helps you create income again please keep  detailed reports and receipts to support your   claims and please remember while reducing tax is a  legitimate goal it's essential to comply with all   the Australian tax laws and regulations if you do  have a rental property I would strongly recommend   speaking with a tax accountant who will be able to  drop the best tax efficient strategy for you and   make sure they're legit the next way to reduce tax  is to take advantage of small business concessions   if you are a small business owner consider taking  advantage of various tax concessions which you are   entitled to this may include the following one  small business tax offset small businesses with   an annual turnover below a certain threshold can  claim a tax offset which helps reduce their tax   payable I'll leave a link down below to this  page on the ATO site so you can check out if   you are eligible you can potentially save up to  one thousand dollars per year number two instant   asset write-off small businesses can immediately  deduct a cost of eligible assets such as equipment   and vehicles up to a certain threshold rather than  appreciating them over time day two has announced   as part of the new budget that they are increasing  the instant asset write-off threshold to twenty   thousand dollars so go check it out and see if you  qualify number three simplified depreciation rules   small businesses can benefit from simplified  depreciation rules allowing them to claim   accelerated deductions for eligible assets  again go check out the ATO site if you would   like to learn more if you have a small business  or you're thinking of starting a small business   then I would recommend seeing a tax accountant to  help you structure their business to make it as   tax efficient as possible the next way to reduce  tax is to make use of government incentives there   are several government incentives out there that  helps you reduce tax one example is the first home   Super Saver scheme which allows you to save for  your first home inside your superannuation fund   potentially benefiting from tax advantages  since you are taxed at 15 rather than your   higher marginal rate it could also potentially  help you save for a deposit faster you need to   be at least 18 years old and have not previously  owned a property in Australia so this incentive   allows you to make voluntary contributions into  your super and withdraw the money when you are   ready to buy your first home so it's similar  to salary sacrifice but you won't have to wait   until preservation age to withdraw your money you  can contribute up to fifteen thousand dollars per   Financial year and up to fifty thousand dollars  in total across all years when you are ready to   buy your first home you can contact the ATO and  request for the release of your savings the ATO   will then instruct your super fund to release the  amount you are entitled to there's still a bit of   a new incentive so I would recommend speaking to  a tax accountant to make sure it will benefit your   personal Circumstance the next way to reduce  tax is to buy Private health insurance devoid   paying the Medicare Levy surcharge the Medicare  Levy surcharge is an additional tax imposed on   high income earners who do not have Private health  insurance in Australia everyone already pays a two   percent Medicare Levy but if you earn more than 93  000 as a single household you must pay a Medicare   Levy surcharge at one percent you can avoid paying  the surcharge by having an appropriate level or   private patient Hospital cover for singles your  cover must have an excess of 750 or less for   families you must have an access of 1500 or less  most Private health insurance packages will be   cheaper than having to pay the Medicare Levy  surcharge so you may as well get it and enjoy   the benefits that come with it so if your income  exceeds the threshold consider speaking to a few   Private health insurance companies and find a  package that best suits your needs please make   sure you double check with them that the package  you choose exempts you from the Medicare Levy   surcharge then every year when you do your tax  return you can enter your health insurance details   and they'll automatically exempt you from the  surcharge as always make sure you keep all your   receipts and invoices just a quick disclaimer I  am not a tax accountant and this video is general   advice for educational purposes only if you're  like a personalized tax strategy then I would   encourage you to go see a tax professional please  use the information in this video as a guide only   to do your own research having said that let's  move on the last way to reduce tax is to regularly   see a tax accountant I know I've already mentioned  seeing a tax accountant a few times in this video   but I think it deserves the category of its own  if you own a business on multiple Investments then   I would highly recommend seeing a professional  tax accountant if you haven't done so already a   good tax accountant is worth their weight in  gold because they will save you thousands of   tax over the years and the best part is their  fees are usually tax deductible as well a tax   accountant can legally structure your business  or Investments to be as tax efficient as possible   remember they do this for a living and up to  date on all the latest tax laws and incentives   here are some reasons why tax accountants are  important for reducing tax number one expert   knowledge and experience tax accountants are  professionals who have special class knowledge   and expertise in tax laws and regulations they  stay up to date with changes in tax legislations   and understand the complexities of the tax system  their in-depth knowledge allows them to identify   legitimate deductions credits exemptions  and other tax savings strategies that you   may Overlook number two maximizing deductions and  credits tax accountants are skilled at identifying   deductions and credits that can lower your  taxable income they analyze your financial   situation review your expenses and ensure you  claim all your eligible deductions number three   strategic tax planning tax accountants can develop  personalized Tax Strategies to optimize your tax   position they consider your specific financial  goals Investments and business structure to come   up with tax efficient strategies by planning in  advance and making informed decisions that can   help you minimize your tax burden both in the  short and long term number four personalized   advice every person's tax situation is unique  tax accountants provide personalized advice   based on your specific circumstances they assess  your financial records evaluate tax implications   and offer guidance tailored to your needs they can  answer your questions address concerns and provide   Clarity on Tax Matters this will definitely help  you make better decisions by the way if you're   enjoying this video then you know the drill guys  and girls leave me a comment down below what is   your favorite way to save tax I always enjoy  reading through all your comments and I try   to reply to every single one oh and the secret  word today is source so if you mention it down   below I will know you're one of the Legends who  made it this far and did the video and if you're   new around here what are you waiting for mate  subscribe to the channel and join the family we   have built such a fun community in the last year  and I truly love you all so those are eight ways   to legally reduce your tax in Australia I know  a lot of you come to my channel to learn about   investing in shares so if you want to learn more  about how to reduce tax on shares then check out   this video on screen where I discuss more Tax  Strategies in Greater detail to help you save   money during tax time thank you for watching I  appreciate you and I'll see you in the next video [Music]   thank you

Channel: Bryan Invest

Views: 218,769

Keywords: #ato, #tax, #australian tax, #investing tax australia, #reduce tax, #legally reduce tax, #investing, #stock market, #australia

Id: xXPBQc7utLY

Length: 13min 10sec (790 seconds)

Published: Tue Jul 04 2023