Tax rules can be complicated, but taking some time to know and use them for your benefit can change how much you end up paying (or getting back) after your tax return submission made before the end of each financial year (Australia).
A few key points about tax optimization strategy concepts to understand before you make attempt to optimize your taxes:
- Tax planning starts with understanding your tax bracket and your status as a legal entity for tax purposes.
- The difference between tax deductions and tax credits and implications in terms of taxable payable.
- Taking the standard deduction versus deductions that are specific to your financial situation and you actual income producing activities.
- Being aware of popular tax deductions and credits that you do not understand well.
- Knowing what tax records to keep that are are related to your income, expenses, depreciation items, fringe benefits, gains and indirect taxes.
- Tax strategies you need to develop to shelter income and/or cut your tax bill legally.
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