Paying taxes is an inevitable part of life, but that doesn't mean we can't be smart about it. By understanding our country's tax system and employing savvy optimisation strategies, we can keep more of your hard-earned money in your pocket. As the famous quote goes, "The only difference between death and taxes is that death doesn't get worse every time Congress meets."

While tax systems vary from country to country, many nations use a progressive tax structure. This means that as your income rises, so does the percentage of taxes you pay on your highest tier of earnings. Understanding income thresholds and tax brackets is the first step in creating an effective tax optimisation plan. It’s something many of us are well aware of in the early days of earning a salary, but over the years it can become lost in the mix and even more complex if we earn from working in different countries.

One universal strategy for reducing your taxable income is to take full advantage of tax-advantaged accounts. These are investment or savings vehicles that offer tax benefits, such as deferring taxes until retirement or allowing tax-free growth. By contributing to these accounts, you can lower your taxable income and potentially move into a lower tax bracket.

Another way to optimise your taxes is to be strategic about your deductions. Some countries allow taxpayers to itemise deductions, such as charitable donations, medical expenses, or mortgage interest. By keeping detailed records and bunching deductions into a single tax year, you may be able to exceed the standard deduction and lower your tax liability. However, it's essential to consult with a local tax professional to understand what deductions are available and most advantageous in your specific situation.

For investors, tax-loss harvesting can be a powerful tool. This involves selling underperforming investments to offset capital gains from other sources. By realising a loss on paper, you can reduce your overall tax burden. As the investor and philanthropist John Templeton wisely said, "The best time to invest is when you have money. The best time to harvest your tax losses is when you don't."

While these strategies can be effective, it's important to remember that tax optimisation should be just one part of your overall financial plan. As the author and motivational speaker Denis Waitley put it, "Expect the best, plan for the worst, and prepare to be surprised." By taking a holistic approach to your finances and staying informed about your country's tax laws, you can make the most of your money at every income level.