Lucky 13 Tips for Saving on Your Taxes

Lucky 13 Tips For Saving On Your Taxes

Tax time can be daunting; it’s that time of year when you look at income for the last year and think- did I really earn that much? The term ‘you gotta spend money to make money’ can often be more apparent than ever during tax season. The Australian Taxation System luckily enough does align itself with this ideology, and can allow deductions that that you may not have considered. Other deductions can be misleading and often taxpayers suffer simply from not knowing what the rules are.

Tip #1 to saving on tax therefore would be to see a financial professional.

Having a tax agent prepare your tax return not only ensures accuracy, but it is a tax deduction.

Tax agents are able to assess your claims, which reduce the chances of being penalised for submitting incorrect information.

Tip #2 is to keep your receipts throughout the year.

This will ensure that you don’t miss any possible deductions. It is also a requirement to keep them for at least 2 years from the date of lodgement for any deductions $300 and over that are claimed in case of an ATO audit.

Tip # 3- yes, up to $300 can be claimed without receipts.

As mentioned earlier, the ATO recognises that there are some costs of working that are difficult to track such as; laundry, costs of running a car & home office expenses.

You may use your car for work-related trips throughout the year. So long as this travel is legitimate, you can claim this travel using the cents per km method. Always seek advice if you are unsure what is considered work-related travel.

Home Office Expenses can also be claimed at a cents per hour method. This is handy for numerous dedicated workers who find themselves bringing their work home, to avoid having to move into their workplace permanently.

Laundry claims can be quite contested, so it is good to be sure before you claim. If there is a visible logo on your company uniform, you are safe. Other claimable clothing items can include protective wear & occupation specific clothing. Up to $150 of laundry expenses can be claimed in one financial year and is claimed at $1 per load.

Tip # 4 goes without saying, the cost of your clothes you claimed for laundry at tip # 3 is a deduction as well.

This is unless your employer has already reimbursed you.

Tip # 5 donations over $2 to verified deductible gift recipients (DGR) will generally offer a receipt.

You’ll never know unless you ask, and whilst some authentic charities are not listed DGR’s; it’s a good practice to investigate what your hard earned dollars are being used for. Political parties, for example are one of the many non-DGR’s that receive donations- however these can often be claimed (so long as they are a registered Australian political party). If you receive anything in return for your donations; it is not deductible (for example raffle tickets).

Do you own a rental property? Tip # 6, just as rental income is taxable income, most expenses to your rental property are deductible.

Like any other business, a rental property must have appeal to be successful, and you may spend thousands of dollars sprucing it up or even just making it liveable. For essential plant and equipment over $300, unfortunately, it cannot be expensed as it is then considered an asset. Which brings us to tip # 7; assets can be depreciated. Your tax agent will advise on the most appropriate depreciation rates.

Tip # 8 it also pays to hire a real estate agent.

Their fees are deductible and what’s more you don’t have the stress of managing it. Agents will keep details of your expenses and send you an end of year statement which makes it simple to add up your deductions.

Tip # 9- tips # 7 & 8 are universal; if you have a business, count and depreciate your assets.

Wherever your business is facing a task that should be completed by an industry professional, listen to your gut. Be safe and get the job done properly and add this to your list of deductions.

Tip #10- if you can afford private health insurance or even income protection it pays

The Australian welfare state serve’s it’s citizens well with provisional healthcare, education and welfare payments (to name a few). Exuberance is expressed where people are self-sufficient, so if you can afford private health insurance or even income protection it pays! The less you access public funds & services, the more you are rewarded.

Tip # 11 encourages super contributions.

Saving for your retirement decreases your need to access welfare payments in your old age. Always check with your tax agent as these amounts are capped and are forever changing.

Tip # 12 (at the risk of sounding repetitive) – seek professional advice wherever you can.

Do your research and make conscious decisions.

Tip #13 Deductions are a great way to reduce your taxes

However, it is important to understand that they reduce your taxable income. Deductions aren’t refunded, they simply lower the amount of income you are taxed on. This usually means that you will be assessed in a lower tax bracket.

Contact Solve Business Accountants located on the Gold Coast, Qld Australia if you need help with your business tax.

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