How to maximise your tax return
For most of us, the tax man has just come knocking. If you are anything like me (and I hope for your sake that you are not), this involved a frantic scramble through receipts and folders, and some self-flagellation due to my lack of filing.
I’m sure that habit of mine loses me at least a couple of hundred dollars a year because receipts for some of the valid deductions I could have included are buried underneath three months worth of the Herald.
So I’ve decided to reform. Here’s how next year is doing to be different for my tax return and I:
File file file
Set aside all receipts into one folder. Keep the ones you’re not sure about, and check with someone once tax time is here. For instance, if you work partially from home and have a separate room set aside to do so, you can claim some costs, such as part of your electricity. If you have an investment home, and need to travel to see it, it’s claimable. Make sure you only claim the expenses relating to actually seeing the property, as the Tax Office tends to frown on people claiming two weeks in Noosa to check on the showerhead of a house.
Understand depreciation
If you’ve got an investment property, fixing yourself up with a Tax Depreciation Schedule prepared by a Quantity Surveyor is a must. It’s 100% tax deductible, and can save you thousands of dollars. For buildings built after 1985, even the building itself is a depreciating asset, so make sure you’re fully aware of what you can include in your tax return.
Remember to be gross
Income from an investment property must be declared as a gross amount, with any agent’s fees included as a deduction. A good guide (though a couple of years old) is here, http://www.taxinstitute.com.au/go/seminar-presentations/essential-rental-property-issues-presentation
Get educated
If it relates to your work, the costs of self-education are tax deductible. So if you would like to up-skill or extend your knowledge for your work, you should think seriously about enrolling in a bit of extra education and claiming it on your tax return.
Get charitable
Any donation over $2 is tax deductible. You’ll need a receipt for the donation, but it’s great for the recipient and it’s great for your tax return. I believe they call that a win-win.
Understand your offsets
You may qualify, you may not, but there are a lot of offsets out there and it’s a good idea to check whether you are eligible for one. These include the dependant spouse tax offset, the private health insurance rebate or the baby bonus. It’s best to have a chat with the ATO or your financial advisor about it though.
To e-tax or to not e-tax?
It’s a difficult question, and depends mostly on how complex your tax return might be and whether or not you require a financial advisor. I love e-tax because it stores all my information and gives me less things to hunt down. I also love it because the help section is comprehensive on every element of the return. But I have straightforward income and expenses. If you’re not sure on what you’re entitled to, I would suggest seeing a financial advisor.
What do you do to maximize your tax return?
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