While being self-employed brings about tons of different benefits, the major ones being the fact that you simply work for yourself and not under someone else, there are also big challenges to be faced. You need to manage your time wisely, and when it comes to money, you’re more or less on your own when it comes to how and when to spend it. Also, there’s one problem with the money you’re earning: taxes. You’re not exempt from taxes, and you definitely need to stay on top of it!
That said, taxes can be quite costly to you, especially in the long run. Fortunately, there are many ways to pay less tax to help you save money. So, to help you minimise your tax bill, here are some tips that self-employed individuals can use to pay less tax:
1. Make Super Contributions
If you’re self-employed, you can make extra contributions to your super fund. Why is this important? Simple! The contributions you make to your super can be used to claim a tax deduction. This is a great way to reduce your taxable income and boost your retirement savings at the same time.
2. Claim Work-Related Deductions
If you’re self-employed, you can claim a range of work-related deductions on your tax return. This includes things like the cost of running your home office, travel expenses, and the cost of tools and equipment. These are known as business expenses, and all can help you reduce taxable income.
3. Use Depreciation Deductions
If you own assets such as a car or a computer, you understand that their value depreciates over time. While this, at face value, means that you’re losing money, you can, in fact, use it to claim depreciation deductions on your tax return. This is a great way to reduce your taxable income and boost your cash flow.
4. Use an App to Better Manage Your Tax Records
Many self-employed individuals keep their receipts and other tax-related documents in a shoebox or other forms of physical storage. Although this may seem convenient, it can be a huge problem when you want to claim your deductions later. You may misplace important records or damage them.
It’s much more convenient to use an app to manage your tax records to reduce the risk of losing your documents and maximise your deductions.
5. Work with a Tax Agent
If you aren’t too sure what you can do to minimise your taxes, then working with a tax agent is a smart idea. A tax agent can help you to maximise your tax deductions and minimise your tax liability. They can also help you to stay on top of your paperwork and ensure that you’re meeting your tax obligations, keeping you away from unnecessary trouble.
As you can see, there are just so many ways you can employ to reduce your taxes. You can make super contributions, claim deductions, and use apps to manage your tax records. Moreover, you can work with a tax professional to help you with your taxes.
TaxLeopard offers a quick tax solution for self-employed individuals. If you are looking for an Australian tax solution to help you stay on top of your taxes, check out what we offer!