Secure Your Family's Future By Cutting Your Tax Bill

by - 8/15/2017 08:49:00 PM

Nobody likes to pay tax, but we all have to do it. It’s a necessary evil that makes sure that the country can still function. Of course, we’d all like to stop paying it but that would cause chaos. However, what you can do, is reduce your tax bill so you’re still doing your part, but the financial strain isn’t so heavy and you can save for the future. A lot of people don’t bother looking into reducing their tax bill because they’re only thinking about the illegal methods. But there are all sorts of ways that you can reduce your tax bill without breaking a single law. If you think you’re paying too much, here’s how to cut your bill today.

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Salary Sacrifice

Salary sacrifice or salary packaging is one of the most popular ways of reducing your tax bill because it’s simple and it benefits you and your employer. When your tax bill is calculated, it will be based on your income and you’ll be put into a certain tax bracket depending on how much you earn. For example, anybody that earns between $9,326 and $39,750, pays 15% tax. Say you were to earn a little over that amount, maybe $40,500, you would be in the next bracket and you’d be paying 25%. So, even though you aren’t earning that much more, you’d be paying a significantly larger amount of tax. If you can cut your salary so you are back into the lower bracket, you’ll save money. But you don’t want to take a pay cut, so you use salary sacrifice. The way that it works is that companies like easisalary put together a package with you and your employer in which you take a pay cut, but that money still goes to you in the form of benefits. So, on paper, you’ll be getting paid less and be in a lower tax bracket, but that money will be made up in the form of health or dental insurance, or other such benefits.

Give To Charity

Giving to charities is always a good thing, but did you know it could cut your tax bill as well? Everything that you donate to charity is exempt from tax, so if you put it down on your tax return forms, you will receive a percentage of it back. This is a good way to offset extra earnings that might push you into a higher tax bracket. You won’t receive it all back but if you crunch the numbers right, you could save overall.

Claim Everything

When you’re claiming tax exemption on things, people don’t always realize what they’re entitled to. You can claim on anything that you use for work. That doesn’t mean anything that you use solely for work. For example, if you buy a new computer that you sometimes use for work and sometimes use for personal stuff, you can still claim on that. There are quite a few big items like that which people often miss, meaning that they pay a lot more tax than they need to be.

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