There’s less than a month to go until the end of financial year and the money-crunching countdown is on.
Completing your tax return can be a daunting (and tedious!) task but there are many ways to maximise your potential refund and tax savings. Just make sure you don’t leave it until the clock strikes midnight!
Here are 10 tax tips to help you shrink your taxable income, plump up your bank balance and successfully toast in the financial new year:
1. Know your income. Before calculating your deductions it’s important to identify your income tax bracket, so you know your tax obligations and can consider your investment, insurance and retirement options. Check the ATO’s individual income tax rates here and use Mozo’s income tax calculator to see how much tax you pay and how much you have left.
2. Become a receipt hoarder. Another major priority is to keep all your dockets in either soft or hard copy form for all expenses you believe you’re entitled to claim. Even if you’re not sure if you can claim those new work threads, squirrel away all receipts and ask your tax accountant (you never know!).
3. Be generous and love thy charities. Being a Good Samaritan before June 30 will help you reduce your taxable income, plus you’ll feel that warm glow from giving to others. It’s a win, win situation! You could even consider setting up regular payments to the charity of your choice, to claim for next year’s tax return.
4. Go the full monty and claim everything (clause: you’re entitled to). There’s a long list of things Aussie workers can claim, such as work related travel expenses, uniforms or study. Just make sure you keep a record!
5. Consider your health stealth. Aussies with private health insurance can claim the health insurance rebate from the ATO at tax time that helps cover the cost of premiums. It’s income tested, so the amount you receive back will depend on how much dough you make.
6. Make big bustling purchases. We are not telling you to go bananas and blow all your hard earned cash but if your laptop needs replacing or your home study requires some sprucin’, this might be the perfect year to make those large purchases to bring down your taxable income.
7. Review your tired cover. Now is a great time to reevaluate your insurance options. The insurance you signed up for a few years ago might not be the most competitive for you now. You can easily compare all major Australian insurance policies in Mozo’s insurance section here to find the best deal for you (and your family).
8. Make spouse contributions. If your spouse (married or de facto) is a low-income earner or not-employed, the ATO allows you to claim an 18% tax offset on superannuation contributions of up to $3,000 on behalf of your partner into their super fund or retirement savings account.
9. Claim repairs and maintenance. If you own an investment property, tick those (much, much) needed property or maintenance repairs off the list before June 30. Your tenants will be chuffed and so will your tax return!
10. Create a budget to ring in the new financial year. Once you’ve completed your 2014 tax return (and all years prior) you are granted a fresh money start, so learn from your previous financial mistakes and plan ahead for next year’s tax return. It’s never too early (or late) to improve your tax back swagger! Try Mozo’s free budget calculator here and open a high interest savings account to stash your cash.
So will you be ringing in the financial new year blowing the party horn or do you need to make some EOFY resolutions? Let us know below!