The government requires everyone earning an income to pay income tax. Nevertheless, there are ways you can earn money and not have to put up with taxes.
If you don’t know which of your expenses qualify for a tax deduction, you can work everything out with your Tax Agent from Perth Mobile Tax. These income tax professionals help taxpayers calculate their tax deductions and claim even expenses they had no idea were eligible.
Australia’s Progressive Tax Income
In a progressive tax system, the more you earn, the more you pay. Different categories of taxpayers have different tax brackets. On top of that, everyone must pay the 2% levy on Medicare.
How To Calculate My Taxable Income?
Taxable income is what’s left after you deduct the expenses you’ve made to earn that money. It is easy to calculate by adding up eligible expenses and subtracting the result from the amount you’ve earned during the financial year. This is your taxable income, namely the amount you owe tax on. In order to optimize your finances, you have to make sure you claim all of your eligible expenses.
How To Proceed With Paying My Income Tax?
If you have a salary, your employer will take care of paying your income tax. The amount will be automatically deducted from your wage and paid to the Australian Taxation Office for each month or pay period.
Any other type of income you earn such as bank deposit interests, shares, and property requires you to handle the income tax calculation and payment yourself.
For each year, you’ll have to fill in your income tax return. You’ll probably work with a tax agent, so you’ll need to let them know if you earn money other than the salary from your employer. In some situations, your employer would have paid an amount that qualifies you to receive an income tax return after the deductions.
Who Must Lodge A Tax Return?
As a taxpayer, you must lodge a tax return even if you earn less than the threshold for your category. Everyone in one of the below categories will need to a ledge a tax return:
Australian residents earning over the $18,200 tax-free threshold (calculated for the income year)
Resident taxpayers who earn less than the $18,200 threshold but had tax automatically withheld by their employer
Everyone carrying on a business, regardless of their profit (or loss, thereafter)
How To Claim My Tax Deductions?
Claiming as many tax deductions as possible is a clever and legal way to optimize your income tax. Consider adding all expenses you’ve done for your job, and you may have the nice surprise of qualifying for a tax return.
Do you remember the old adage saying that it takes money to make money? Well, if you’ve made expenses to earn your living, you are entitled to claim these amounts as tax deductions. Such expenses include but aren’t limited to buying uniforms, cleaning work outfits, paying for meals, travel and commuting, and ongoing education. Keep in mind, though, that all of these expenses must be directly related to your work. Personal expenses aren’t eligible for a tax deduction on your taxable income.
Contact a tax professional right now to talk about your tax return. You’ll get help in sorting out your finances. Their fees are fully deductible, so this cost is much lower than it actually appears.