June 29, 2016
With the new financial year fast approaching, now is the perfect time for Australians to get their finances in order.
Mortgage Choice chief executive officer John Flavell said there are a few simple steps that Australians can implement in order to maximise their tax refund this year and ultimately achieve better bang for their buck.
“In order to maximise your tax refund, the first step is to know exactly what you can and cannot claim. For example, most people don't realise they are able to claim home office and certain travel expenses,” he said.
“Just being able to claim simple measures like work stationary or part of your monthly phone bill can help you to grow your potential tax refund.
“By knowing exactly what items can be claimed, you can ensure nothing is overlooked and you receive the best possible tax refund.”
In addition to knowing what items are claimable, Mr Flavell said there are some other tax tips that everyone can follow to give their refund a boost.
Step 1: Record everything
“One of the best ways to maximise your tax return this year and every year is to create a place where you store all of your receipts. Having the one place for all of your tax receipts will not only save you the time and hassle of digging them up at tax time each year, but it will also ensure you don't miss out on vital deductions that can really boost your tax refund,” Mr Flavell said.
Step 2: Include everything
One you know exactly what you can and cannot claim, Mr Flavell said it is critical people don't overlook smaller items simply because they weren't expensive.
“While a $10 charitable donation here and there may not sound like much at the time, over the course of the year these expenses can add up and easily run into hundreds of dollars. So, before you dismiss your charitable donations as ‘small stuff', think about how much you have spent on the ‘small stuff' over the last 12 months – you may be surprised. At the end if day, claiming all the ‘small stuff' can really help boost your tax refund,” he said.
Step 3: Give yourself plenty of time
While your tax return isn't generally due until October each year, Mr Flavell said it pays to start the process as soon as possible.
“The more time you give you or your accountant to prepare your tax return, the more time you will have to ensure nothing is accidentally excluded. People are generally not aware of everything they can and cannot claim, nor do they have the time or the energy to pull all the receipts for the items they can claim,” he said.
“The sooner you start preparing your tax return, the more time you will have to find tax receipts and find out exactly what is claimable. For example, many property investors don't know about the range of expenses they can claim, including agent fees, advertising costs, body corporate fees, building maintenance, cleaning costs and travel to and from the property. In addition, many property investors don't realise that they can claim depreciation on their investment property. Depreciation applies to new and existing residential properties. And in most cases, owners of an investment property or properties are likely to be able to claim something.”
“Of course, everyone's situation is different, so it is important to consult a financial adviser to help determine any tax deductions.”