As an Australian ex-pat, you may be required to report your worldwide income to the ATO for tax purposes. If you don’t report it fully and correctly, you could end up being double-taxed and face fines. You probably need Australian ex pat tax advice to get the job done. Here are five tips to help reduce your tax liability so that neither you nor the ATO gets bitten!
Keep Your Residency Status Up-to-date
Australian tax law considers you a resident if you spend more than six months in the country each year. If you spend less than 183 days in Australia or have been away from Australia for more than half of that time, then you will be considered a non-resident for tax purposes.
As a non-resident, you won’t be required to file an Australian tax return unless your income exceeds A$75,000. Further, to avoid this situation, make sure your residency status remains up-to-date with the ATO (Australian Taxation Office).
Lodge Your Tax Returns on Time
The first tip is to ensure that all of your tax returns are lodged on time. If you don’t lodge them on time, then they could be subject to late lodgment penalties, which can add up quickly. If a return is lodged late, then those penalties can reach up to $900 per month.
If this happens, then it’s important not only to lodge the return but also to apply for relief through the ATO so that these penalties don’t continue to accrue.
Pay Your Taxes on Time
Another tip is to ensure that all of your tax obligations are paid on time or at least before they’re due through Australian ex-pat financial advice. This includes paying provisional tax, which is an estimate of how much tax will be owed for the year and must be paid by 1 July each year if you have a business or earn more than $80,000.
Keep Good Records
If you’re going to be claiming deductions, then you need to keep good records. The ATO recommends that you keep receipts for all your purchases and document any expenses related to living overseas with a diary or spreadsheet. This will help ensure that all costs are accounted for when calculating your tax bill.
Create an Expense Log
The easiest way to keep track of your expenses is with an expense log. This log should include all of the deductible expenses related to running your business or earning income from investments. You’ll be able to use this information when filing your ex-pat taxes later on under Australian ex-pat tax advice. To learn more about this topic visit our website.