When it comes to taxes, many people procrastinate at the end of the financial year.
My advice is to take action now and get your tax-deduction money back sooner. Remember, your tax return is your money, and it’s better in your pocket than the Australian Taxation Office’s (ATO).
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Here are some more tips to think about when it comes to your tax return:
Make deductions
The best way to get a higher tax refund is to make every legal deduction count. Deductions are expenses that are work-related and that your employer does
not reimburse you for.
Here are some of the most common ones:
- Vehicle and travel-related expenses
- Clothing, laundry and dry-cleaning expenses
- Communication expenses: mobile phone, internet, etc.
- Self-education expenses
- Tools and equipment
2. Keep a record
You need to keep a record of your deductions – bank statements, transaction receipts – they all matter. Keep them in a folder on your computer or in physical form.
Think about what you can claim as a tax deduction.
Did you donate to a charity? That’s a deduction and your receipt is proof. Did you have investment losses? Your profit and loss statement is proof. Do you have an investment property? All the costs associated with it are possible deductions and you need proof.
If you aren’t sure whether an expense is deductible or not, keep a record of it anyway! Your tax consultant should be able to advise you.
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3. Boost your super
Under the superannuation tax-concession rules,
you can add up to $27,500 a year into your super. Therefore, if your employer pays $10,000 into your super fund each year you can put away an additional $17,500. That difference rolls over every year, so if you don’t contribute this year and your employee contributions stay the same, you could effectively add $35,000 next year and so on.
This will help reduce the personal income tax bracket you sit in while adding to your retirement savings at the same time.
4. Prepay services
Paying recurring bills weekly or monthly might
be more convenient and part of your budgeting plan, but from a tax perspective, it’s better if you pay bills in lump sums. This is because you can claim these deductions in this financial year for expenses which relate to next year.
It will help you reclaim these expenses now rather than later and lead to a higher refund in the current financial year.
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