Expert tax tips: how to get the most from your tax return this EOFY
June 30 is looming, and bringing tax time with it. Whether you’re a small business owner, working for yourself or someone else, your main priority when filling in tax forms is probably to snag yourself the best return possible, right?
Well, to help out this year, Mozo has turned to the people who make saving on taxes their business. These experts have shared their top tips on what spends you can claim and the tricks you can employ to wind up with a bumper return this tax season.
1. Keep a thorough record of purchases
It’s a good idea to keep an eye on any purchase you make of “income-producing purposes” says Simone Gielis, senior tax agent at Etax.com.au, as you can instantly claim anything that costs under $300.
“Whether it’s a new portable hard drive, a Bluetooth keyboard, or wireless router for your home Wi-Fi network, these purchases can add up and result in a decent deduction off your total income,” she says.
2. Prepay work related expenses
One thing all the experts agree on was that if you want to maximise your tax deductibles, a good strategy is to prepay whatever work-related expenses you can such as membership fees for professional groups or programs or subscriptions to industry magazines and journals.
There are also a couple of good reasons to pick out an income protection insurance policy and pre-pay for it this financial year. “It’s a win/win in that it’s tax deductible and if you do ever find yourself out of work you’re covered,” says leading online accounting consultant Debra Anderson.
3. Consider delaying income to next financial year
It might seem counterintuitive, but according to Gielis another way to save money at tax time is delaying your income. “Since you are taxed on income you earn in the financial year, delaying that income to July 2017 means you won’t be taxed on it in this financial year,” she says. This might be a good strategy if you’re due to pick up a big bonus, or capital gains from selling shares or investments.
4. Note the hours worked from home
If you work from home, there are a couple of claimable deductions you may not have thought of yet. Do you regularly check your emails or answer phone calls out of hours? Then you can claim some of your phone or internet bill, says Gielis. Just remember that you’ll need to calculate how much of your home use is work-related and only claim for that amount.
Peter Khalil, founder of Perris Knightsbridge Chartered Accountants, also shared a bright idea you might not have thought of: “You may also claim a deduction for electricity, so keep a track of the hours you spend working from home.”
5. Make extra contributions to your superannuation
Topping up your super before the financial year ends is, “virtually guaranteed to save you tax,” says Kahlil. If you’re under 50, you can make concessional (before tax) contributions up to $30,000 and if you’re over 50, you can contribute up to $35,000 extra.
6. Be charitable
Once you’ve ticked off all the work-related expenses that can be claimed on your tax, you might think you’ve done all you can do - not so. One other thing to keep in mind is any money you’ve donated to charity during the year. But remember, cautions Anderson, as soon as you ‘get something’ for making a donation (like Christmas cards or pens) it’s no longer tax deductible.
Now you’re ready to claim your bumper tax return, make sure you have a high interest savings account to stash your dollars in. You can compare savings accounts with our tool, or search for business savings accounts in our comparison table.