Tax filing tips as money experts outline easy ways to get more money back

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Employees can have more cash in their pocket after their tax return if they follow five simple rules.

Money expert Nicholas G. Muscat revealed in one video the shortcuts would not only lead to a larger tax return, but also to a significant reduction in the amount of tax deducted from an income.

There are five ways you can lower your taxes. It’s what no one wants to talk about, but everyone should talk about. ‘

The tips are as simple as sacrificing salary, reporting expenses, and setting up a trust just to name a few.

The Australian tax office has already registered a record number of tax returns this year.

The start of the new fiscal year on July 1 saw the tax authorities’ website crash as people rushed to file their tax returns.

Money expert Nicholas G. Muscat (pictured) revealed in a video that the shortcuts would not only lead to a larger tax return, but also a significant reduction in the amount of tax on an income.

Mr. Muscat said one of the best ways someone can lower their taxable income is to file depreciation claims on investment property (stock image)

Mr. Muscat said one of the best ways someone can lower their taxable income is to file depreciation claims on investment property (stock image)

Mr. Muscat said one of the best ways someone can lower their taxable income is to file depreciation claims on investment property (stock image)

Within two days, the ATO received a whopping 230,000 tax return applications.

More than 457,000 individual reimbursements were completed in mid-July, which is higher than the 389,000 claims filed in the same time last year.

The Australian tax authorities have allowed wage earners to claim 80 cents for every hour they worked from home between March and September.

The fixed hourly rate can replace the lengthy process of reporting individual expenses, although experts have warned that taxpayers could fall short.

Mr. Muscat pointed out that employees are missing out on more savings simply because they had no idea what to claim.

“If you understand the basic concept, you can lay claim to whatever you use to earn an income,” said Muscat.

‘You can claim after buying, washing and maintaining your uniform.

‘If you do a job where you read a lot, magazines, relevant content that you could buy or subscriptions, then you can claim it.

Five tricks for less tax and more efficiency

Money expert Nicholas G. Muscat revealed five tips workers could follow if they want less tax and higher returns.

1) Claim costs

Mr. Muscat says an employee can claim ‘anything you use to earn an income’. That includes uniform expenses, subscriptions, or equipment. As long as it’s used for work purposes, you can claim it.

2) Depreciation receivables on investment properties

Mr. Muscat says a homeowner can claim a tax deduction for a rental as it slowly diminishes in value over time.

The claim can be made against structural depreciation or items permanently attached to the home.

3) Salary sacrifice

Employees can choose to take money off their paycheck and refer directly to their superior before being paid.

At the end of the week, their paycheck may be smaller, but that could mean their income is dropping by a tax bracket and they are actually taxed less.

4) Start a business

Mr. Muscat says it is best to start a business because ‘the least advantageous position is to be an employee’.

5) Set up a trust fund

Mr. Muscat says people with a high income can put their assets in a trust fund under the name of a lower income. This means that they are taxed less.

“If you train in the sun, you can claim glasses and hats.”

Australians who worked on the front lines earlier this year to fight the forest fires or the coronavirus are also entitled to a claim for protective equipment as a deduction.

That includes gloves, face masks, disinfectant, or antibacterial spray paid for by store workers and hospitality industry.

Mr. Muscat goes on to say that homeowners can also claim amortization on their investment properties.

“Everyone knows that real estate can be a big tax evasion, but a lot of people forget one of the biggest aspects of how to avoid real estate taxes and that is depreciation,” he said.

“You can claim depreciation because the house is in disrepair and the government is giving you numbers, and you can claim all of that and that can make a huge difference to how much tax you pay.”

A homeowner can claim a rental tax deduction as it slowly diminishes in value over time.

The claim can be made against structural depreciation or items permanently attached to the home.

In most cases, the Australian tax office will only allow real estate investors to reset the depreciation by two years.

Homeowners will also have to prepare a depreciation schedule – which involves hiring a qualified quantity expert to inspect the property and prepare a report for the accountant.

Mr. Muscat also said that an employee can choose to sacrifice their salary to lower their taxes even further.

“If you make $ 35,000 or more, it’s almost totally worth the effort to sacrifice a certain amount every week because you’ll end up with more money left over,” said Mr. Muscat.

Salary sacrifice is usually used when an employee chooses to send a portion of their salary directly to their retirement account before being paid.

The employee may look like he is getting paid less at the end of the week, but the lower salary can lower his income by a tax bracket.

This means they end up taxed less, when essentially more money goes into their super.

 

Mr. Muscat said employees overlooked some work costs on their tax returns, meaning they are missing out on more money (stock image)

 

Mr. Muscat noted that a salary sacrifice can also be made for more things than just retirement.

“You pay for things like a car or phone with your pre-tax income, so you save money if you understand the basics of tax,” he said.

Mr. Muscat’s last two suggestions to cut the tax were to set up a trust and start a business.

He admitted that setting up a trust fund was more beneficial to high-income people.

He said it would be better for them to put their savings or investments in a trust person who made less money because that would reduce the tax on their assets.

As you earn more, you go up in the tax bracket. If you have a spouse, or someone close to you, who has a lower marginal tax bracket … and you pay less money. ‘

Salary sacrifice was tipped as another tactic an employee could use to reduce the amount they are taxed each year (stock image)