With just a little over six weeks to go until the end of financial year, it’s the perfect time to start planning your tax return to keep yourself ahead of the game. Here is a week by week checklist to make sure you’re not losing some of your precious salary just because you left it too late.
Week 1: Go digital with your paperwork
Keeping your paperwork sorted is a huge step towards a smooth EOFY. There’s no need to pile up all those salary slips and old bills at the back of a drawer that you only open every June. Make it simpler by collecting all your important financial documents in a digital folder that is easily accessible wherever you are.
Whether it’s your employer or your financial provider, everyone gives an electronic copy of your financial statements making it easy to go digital. This will also help when you won’t have to sift through a hundred documents while you are looking for something specific.
Week 2: Compile your receipts
Now that you’ve collected one set of documents, start working on your receipts because while there’s a long list of things you can claim, you will need to show records. However, if you can’t find all the records, remember that you can claim up to $300 worth of some work related expenses even without a receipt. Ask your tax accountant about the expenses that you can claim or go to ato.gov.au to seek examples of work related expenses relevant to your occupation that you are entitled to claim.
Week 3: Become salary savvy
Ideally you should already be on top of this, but it’s always a good idea to reevaluate your salary and understand your tax bracket so you can plan your insurance, investment and other finances accordingly. Use Mozo’s income tax calculator to see how much tax you pay and how much you have left.
Another good tip to keep in mind is that if your partner is a low-income earner or is unemployed, the ATO lets you claim 18% tax offset on superannuation contributions of up to $3,000 on behalf of your partner into their super fund or retirement savings account. You can be entitled to a maximum tax offset of up to $540 every financial year if you fulfill certain conditions outlined by the ATO.
Week 4: Review your insurance
After you have taken a fresh look at your tax bracket, set some time aside to reanalyse your health and income protection insurance options to make sure you still have the most competitive policy. It’s a good idea to look up the various Australian insurance providers and find the best deal for yourself.
Week 5: Spend some money - make the most of EOFY sales
This is the perfect excuse to shrink your taxable income. Retailers plan attractive end of financial year sales so use these to your advantage. It’s the ideal time to buy those big ticket items like a television or laptop, or if you’ve got an investment property or work from home, go for that much overdue household maintenance and lower your taxable income. After all, retail therapy can also have tax benefits.
Week 6: Start thinking ahead
Now that you are basking in the early bird glory with most of your work done, spend some time planning your finances for the coming year. Whether it’s comparing the best savings accounts through Mozo’s comparison tools, or setting up regular payments to a charity of your choice so you can reap the benefits next year, it’s never too soon to plan.