This information could help you save money this tax season.
Keep Good Tax Records
This is easier now with smart apps and easy to use software.
Tax deduction claims need to be paired with receipts that you can show to the ATO. Keeping track of those receipts is the law, but it’s also the best way for you to remember everything that you can claim later on.
Keeping good records is the #1 way to make sure you claim every expense you are entitled to (and help ensure your tax process runs smoothly). Get organised—it’s easy!
Record-keeping shouldn’t be a headache for you. Just take 5 minutes each week to put your receipts into a folder (or save them online) and update your logbooks. We guarantee it will save a lot of pain and anguish at the end of financial year—and it’ll help you pay less tax!
Here is a link that might help:
Did you know that every donation over $2 you make to a registered charity is tax deductible? After you make any donation you should be given a receipt. At tax time, add up the donation receipts and you can claim it as a tax deduction for the preceding financial year. Basically, some of the money you donate to good causes enables you to pay less tax.
- Remember: Keep your receipts in a folder. Later, when you’re ready to do your tax return, you’ll be able to find them and claim some extra deductions that will help you pay less tax.
- Another thing about donations we should clear up: Your donations don’t come straight back onto your tax refund. They are subtracted from your taxable income, which means you get a percentage back (depending on your income and taxation rate).
Claim what you are entitled to claim
Claiming deductions is one of the best tools in reducing your overall tax payable. If you have to spend money during the year and it relates to earning your income, then keep the receipt and make sure you claim a deduction for what you are entitled to. Even if you use the item for part work and part personal, you can still to claim an apportioned deduction.
If you are not sure whether you can claim a particular item, keep the receipt and ask us later, when you prepare your next tax return. It is better to keep a receipt and not claim it, than to throw it out and find out you could have included it on your return!
Seek the Advice of Tax Professionals
In most cases using a tax agent or accountant can not only save you a lot of time, but will also improve your tax refund or net payable. This is why the ATO’s statistics show 70% of Australians use a tax agent’s service – like DASperth.com.au!
At DASperth we are experts in tax and we have up-to-date and in-depth knowledge of tax laws and changes. We may find you are entitled to deductions you were unaware of or even an offset you didn’t know existed. Quite often our people spot and correct little mistakes that could slow down a taxpayer’s refund or, worse, that could cause an ATO reassessment or audit later on. And the best part is; the cost of the DASperth can be claimed as a deduction on next year’s tax return.
A tax agent’s job is to help you steer clear of ATO problems and to help you pay less tax.
Medicare Levy Surcharge
If you do not hold a private insurance policy, as soon as your income exceeds $90 000 for singles
or $180 000 for families, you will be required to pay a minimum of 1% extra in the form of the Medicare Levy Surcharge. This is on top of the compulsory 2.0% Medicare levy paid by most Australian taxpayers.
Often the cost of taking out private health insurance will cost less than the 1% of your gross income you will be required to pay when completing your tax return.
YOU control the timing of your tax-deductible expenses
If you know in advance that you will have large tax-deductible expenses, sometimes you can choose which financial year you purchase them in.
Depending on your expected levels of income or deductions you may want to adjust when you purchase the item accordingly.
For example, if you have a large expense that is tax deductible and your income for a particular year is going to push you up to the next tax threshold, it may be best to purchase your item right then. This will lower your taxable income for that year and may even move you down into a lower tax bracket. Alternatively, in a year that you took an extended holiday or unpaid leave and your income (and tax) was lower, it may be more beneficial to delay purchase of larger tax deductible items until the next time your income and tax jump higher. This will help you reduce tax paid tax paid on the higher tax bracket and save yourself more money than if you purchased the item when you were in a lower tax bracket.
Depending on your individual finances or circumstances, making an investment can also help you reduce tax. However, this is certainly not the case for everyone. Before you decide to invest, speak to your financial planner who can advise you if an investment will suit you. Remember, the investment should benefit you now and into the future – there is no point saving a small amount of tax now if it is a poor investment and you end up losing your original capital in the long run.
Adjust finances based upon circumstances
If you have a partner, it may be possible to adjust your finances to suit your circumstances. For example, if a couple had funds invested in a short term account earning some interest, it would be beneficial to invest it in the name of the lowest income earner as they will have to pay the least tax on the interest earned on that account.
Don’t skip the little items
Whether or not your deduction is $2, $20 or $200, they really add up as the months go by. Ensure you keep every one of your receipts, no matter how small they are and you will have the best opportunity for maximising your refund.
Remember, if you are not sure whether you can claim it, keep the receipt and ask your DASperth accountant for advice later, at tax time. (Just ask a question in “Leave a Message” on our DASperth website.)
If you plan to sell one of your assets which may be subject to Capital Gains Tax, there are a number of things you should consider. For example, if you have owned the asset for longer than twelve months you may be entitled to a 50% Capital Gains discount. And, you may choose to sell the asset in a year you expect to earn lower income as your capital gain won’t have as big an impact of your tax liability.
Do you have any other methods you use to reduce tax and maximise your refund? We’d love to hear them. Contact us on social media using the links on our web page www.dasperth.com.au or if you prefer email us on firstname.lastname@example.org
dasperth.com.au is a boutique Accounting Practice based in Northbridge, Perth Western Australia. Specialising in small to medium businesses and individuals of high wealth and their taxes With over 50 combined years in tax our clients tax return are reviewed twice by qualified accountants for accuracy and extra deductions prior to lodgement, offering a higher level of support and expertise than most tax agent offices plus we offer a complete electronic service where you don’t have to lift a finger (oh accept to sign the form ), this time-saving convenience is married with help and real people who you can talk to on the phone, face to face, by Skype or online.