6. Reducing the Amount of Tax Payable
Income tax is worked out by the formula:
Tax Payable = Taxable Income x Tax Rate
With taxable income being worked out by working out the assessable income less tax deductions.
Taxable Income = Assessable Income - Deductible Expenses
So it follows that tax can be reduced by reducing your taxable income which could be done by either or both of reducing your income or increasing your deductions.
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