Once again, tax season has arrived. Expenses must be calculated, receipts to inspect, and deductions to make - it is all about maximizing your tax deductions and keeping more money in your pocket.
Most Australians are unaware of all their eligible tax claims, but they still file their taxes without using a tax agent?
It's a chore to do your taxes. Our team understands. The idea isn't new, but before you rush into getting your taxes done in the least amount of time, a little preparation and knowledge will help save you money and maximize your tax refund.
If you forget to deduct work-related expenses, investment costs, or other items, the ATO will not tag your tax return unless it tracks underpaid tax and dubious deductions.
Take advantage of every deduction available to you
It's the easiest way to reduce your tax bill, and if you know all the deductions available to you, you could save hundreds of dollars. It is also possible to qualify for a certain type of tax deduction according to your industry.
There are several common tax deductions to consider, but your tax accountant will walk you through them.
Uniform or protective clothing, laundry, and dry cleaning
Vehicle expenses – petrol, parking, tools, repairs, and maintenance
Mobile phone and internet expenses
Overtime meals and accommodation
Fees, subscriptions, and licenses
Other expenses that are directly related to earning your income.
The time to donate to your favourite charity is before June 30. Once a month donations throughout the year may not seem like much, but when totalled up can represent a significant tax deduction. It will be possible to claim amounts of $2 and up. It is also possible to claim $10 without a receipt. But be very careful the ATO does not view all charities in the same way. You need to be sure your charity is registered as a Deductible Gift Recipient (DGR) so that you can claim the donation as an eligible tax deduction, and you must keep a receipt to record your act of goodwill.
Whether you run a small business or are an individual, you can deduct pre-paid expenses and claim an immediate deduction. The payment must be made for goods or services that last less than 12 months and extend into the next income year.
The payment must be made for goods or services that last less than 12 months and extend into the next income year. Prepaid expenses are tax deductible over the 'eligible service period,' which cannot exceed 10 years. The eligible service period begins with the start of the service agreement or the day the expenditure occurs, whichever occurs later. Prepayment rules do not apply to all goods and services.
Investments that lose money
There are times when investments and shares under perform, yet you're still paying taxes on them. The best time to sell is when you are in a loss, as you are only paying taxes where they are not required. An adjustment can be made based on a capital gain and a capital loss. There can be no claim for losses resulting from donations, gifts, or personal contributions to super contributions can’t be claimed as a loss.
Don't sell shares at a loss, claim the tax deduction, then buy them back at a profit.A penalty will be issued to you, and the ATO will be flagged.
In addition to providing for your future financial security, you'll be able to contribute at a lower tax rate into your superannuation. It is possible to make these extra payments through your employer or yourself. The maximum contribution is $25,000. It depends on whether your superannuation contributions are made before or after a tax payment on whether you owe tax on them.
Employer contributions, contributions you are allowed as an income tax deduction, notional taxed contributions if you belong to a defined benefit plan, unfunded defined benefit contributions, and constitutionally protected funds all fall under this category.
Contributions made after-tax that are not concessional are not taxed. Employers can make contributions from your after-tax income; spouses can make contributions to your super-fund and individuals can make contributions that are not claimed as income tax deductions.
Overpaying into your retirement account may mean paying extra taxes.
You can receive a rebate if your income exceeds a certain amount if you have private health insurance. When you file your tax return, your private health insurance rebate is calculated.
Invest in income protection
It gives you peace of mind to know that if something unexpected happens, you'll be able to claim the amount on your tax return. A tax refund will allow you to pay for additional insurance, such as disability insurance or life insurance. Do not forget to keep the invoice.
You might want to upgrade your skillset and invest in your capabilities. Taking a course that directly relates to your earning potential can be a great tax deduction. You'll be able to claim course fees, as well as phone and internet, travel and vehicle expenses, computer, stationery, and office consumable expenses, as well as investing in yourself to boost your income.
You can reduce your tax bill in several ways. We all have different circumstances, jobs, incomes, and investment strategies. Instant Tax Refunds advise you on how to minimize your tax bill and claim back every dollar you've spent on taxes throughout the year.
Feel free to contact us for any assistance you may require. At Instant Tax Refunds, we strive to provide high-quality service that constantly meets and sometimes exceeds our customers' expectations.