Did you know you can save thousands of dollars on your tax bill every year? If you didn't, what would you say if we told you that there were strategies to limit how much you have to pay to the ATO.
Understanding The Australian Tax Structure
To start saving money, you need to understand the tax structure. The Australian government levied a progressive tax structure on its citizens. This means the more you make, the more you pay. In theory, this is a great idea, but if you make more, you'll certainly see a higher tax bill than you would expect. If you make more than $180,000 a year, which some would consider successful, you'll be taxed 45% of the income almost. The sweet spot is making under $18,200 a year. These individuals pay nothing in taxes.
Avoiding High Fees
Now that you understand the fees associated with being in a higher tax bracket, you may be wondering how you can avoid them. The answer is you can, and you can avoid them legally. By seeking out tax strategies from a professional, you can utilize legal methods for reducing your tax bill significantly. Everyone has this opportunity, yet some fail to do so. But why would you want to pay more taxes when you don't have to?
How Can You Really Save?
Saving money starts with strategy. Do you have things set up where your assessable income is smaller? What you are taxed on is your assessable income. Wikipedia explains, “Taxable income is the difference between assessable income and allowable deductions. There are three main types of assessable income for individual taxpayers: personal earnings (such as salary and wages), business income, and capital gains” on the different types of assessments that can happen to Australian taxpayers.
To reduce your assessable income, you can use methods including offshore strategies, trusts, or even becoming a PTY LTD. Whichever may be best for you depends on your unique situation. That is why it is important to talk with your tax professional about your unique situation. You may be surprised at what options are available to you. Taxpayers are also surprised to learn that they can drop down significantly in tax brackets, even meeting the no taxes mark.
How can you avoid high taxes while operating a business? Talk with an International tax specialist. Here you will uncover the methods for saving using viable strategies that are not only recommended but LEGAL!