Every June tax season rolls around, a reminder of just how expensive life can be. Whether it’s that HECS debt that continues to take a chunk out of your pay or the ongoing costs of personal insurances, it can all add up to a small fortune. But thankfully there are plenty of things you can claim to bring down your taxable income. So to ensure you receive a bumper tax return this year we asked Matt Neill, Director & Principal Adviser for MLC Advice Mackay to reveal his top tips for maxing your 2016 return:
If you’re confused about what you can and can’t claim – the good news is you’re not alone. Recent research* suggests that many Australians are in the dark about what expenses are tax-deductible. In fact, the survey found that 33% of Aussies were unaware that petrol can be claimed, whilst 28% didn’t know that stationery is tax-deductible.
And that’s just the tip of the iceberg, as there are many other things you might be surprised to find you can claim. So this tax-season, make sure you’re aware of these and are not missing out on the thousands of dollars you could have potentially saved this end of financial year.
Here are some strategies to bring down your taxable income:
1. Claim home-office expenses
Working from home or running a home-office may lead to personal and business expenses that are tax-deductible. Even if you work at home for just a few hours a week, you are entitled to a number of claims such as internet or phone expenses incurred for work, stationery purchased for your home-office or even fuel costs for work-related travel. The best part is you don’t have to be a business owner to process claims for your at-home office expenses.
2. Pre-pay plans
If you pre-pay a year’s worth of income protection premiums, you are entitled to claim them all this financial year. This deduction also can apply to pre-paid interest on debt relating to investment in shares and property assets.
3. Transfer and pay via super contributions
If you transfer life and permanent disability cover to super owned policies, and pay for this through super contributions, this transaction can produce greater tax deductions. Additionally, you can setup a salary sacrifice arrangement to pay for the disability cover, which would lower your tax burden as well as the cost of holding these assets.
4. Deduct self-education expenses
If you’re undertaking a course that is work-related or will help to enhance your professional or technical skills, you may be able to claim a deduction for expenses incurred.
5. Make government co-contributions to super
If your annual income is less than $50,454 a year, any additional non-concessional (after-tax) contributions made to your super account before 30 June will earn you a government co-contribution to super. This is a great way to boost your retirement savings and if you’re eligible for a co-contribution, why miss out? Check the ATO’s website to find out if you meet the required criteria.
While these are simple steps to follow, they require planning in advance. If you’re unsure of what you can claim for your job, consult an accountant or finance professional.
*Office Works Annual National Survey on Tax, 2015