It’s crazy how quickly June 30 rolled around, but now that it’s come and gone it’s time to focus on getting your tax done and hoping for a nice big refund in return.
There are several ways you can get your finances in shape for tax time. Here are our top tips:
Take advantage of super concessions
Yes, this year’s Federal Budget cracked down on the tax concessions available for the wealthy, but for most of you the experts say it should be ‘business as usual’.
If you are earning a salary you can make additional contributions from your pre-tax pay that will reduce your overall tax liability. You might even be eligible for a tax deduction on your contributions if you are self-employed.
If you’re in the low income earning bracket you can reap the benefits of the government co-contribution, or — if you earn more than your spouse or partner — you can choose to make contributions on their behalf while also getting the corresponding tax offset. Just be sure to check on what limits apply to each situation.
If retirement looms you might want to consider a transition to retirement (TTR) product, which should be a tax effective way of reducing the number of hours you work without reducing your income and while still affording you the opportunity to contribute to super.
Take the time to review investments
Tax time is a good time to review your investment portfolio and ensure its performing at its best for you. Rental income or share premiums are taxed at the marginal tax rate, and while capital gains from your investments are also taxed at the marginal rate you can look to reduce the amount of tax you have to pay by:
- holding an asset for more than 12 months, thereby halving the taxable component of capital gains
- using your capital losses to offset capital gains and reduce overall tax liability
- checking if you are eligible for a tax deduction if you’ve borrowed money for shares or property.
Claim deductions for all of your entitlements
If you pay for anything that relates to your work, be sure to keep the receipt (even if you aren’t sure you can claim). If you get your tax done by a professional tax accountant they will be able to advise you if you’ve claimed everything correctly.
It pays to be good at record keeping
Don’t waste your time trying to track down receipts from the last 12 months, instead implement a system whereby you are more organised. This can be easily achieved by spending 5-10 minutes each week organising receipts and logbooks, and the end result could have you receiving the best possible refund.
Don’t forget the small items
If you’ve donated money to charity for example the small purchases you’ve made over 12 months can really add up. Don’t lose out on the funds at tax time. Even small items you’ve purchased for work can create a solid tax refund.