5 Tips to Pay Less Tax and Save Money

Managing your taxes is agreeably the task no one likes to do. But if you spend a little time in managing your finances, it will reward you back in the form of tax savings and refunds.

The Australian Government have made may arrangements and tax rules that can help you to save big if you can grab the opportunity properly. Considering these complicated tax rules, I have put together 5 tips that will help you in paying less tax and saving your money.
 
1.Claim All Possible Deductions

For every business expenses, you can reduce the overall tax burden on the income. As per the Australian Taxation Office (ATO), you are allowed to claim any expense as a business expense, if it's directly related to the operation of the business or company. To claim any business expense just include it in the company tax return or your business return as the case may be. Don't forget to preserve receipt of expense or invoice supporting your expense. 

 
2.Write Off Bad Debts

For every business owner, bad debts are like a nightmare which are often results of insolvency or inability of the customers to repay the credit. But businesses have an option to claim a tax deduction of those bad debts which are written off. Writing off a bad debts means the business has tried everything to recover that amount but there is no possibility of getting that amount back. Along with the tax deduction, you can also get GST credit for the amount written off as bad debt.
 
3.Manage Prepaid Expenses

It's always better to pay at the right time but in the world of taxation, sometimes it's better to pay in advance. Some expenses concerning next year if paid in the current year, can bring more refunds and higher tax deductions. Expenses like insurance, rent and phone bills can be prepaid to claim deductions. Do take care that the these prepaid expenses are less than $1000 or meeting the 12 months rule, i.e. you can avail immediate deduction only if the expenses are for that service which doesn't exceed 12 months.
 
4.Regular Stock Taking

Keeping a regular eye on the stock of both raw material and finished goods is essential. It helps in meeting the targets and timely ordering the goods and also helps in controlling the obsolete or depreciated items. These depreciate or obsolete items can be written off from the books of the company completely. While filing the tax return of the company, you can claim this obsolete stock by lowering the value of stock in trade that can eventually lower down the income of the year.
 
5.Expert Assistance

You need to be updated about the latest knowledge in the fields of taxation. The more information you have, easier it will be for you to plan your budget. When planning for the tax, it's better to take assistance from an expert tax consultant. You can ask the expert about the deductible expenses and other investment schemes for the company. Before filing a tax return you can ask him to verify whether all the deductible expenses are claimed or not.
 
Final Thoughts

You can not avoid taxes, but you can legally reduce what you pay. With a systematic plan, you can lower down the tax expense of your business or company.

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