Whether you’re a Salaried (PAYG) employee or a small business owner, you’ll want to make the most of your tax return.
End of the financial year approaching fast. Now is a great time to think about your tax return and what you can do to get the most out of your situation and hopefully a refund.
To ensure you see the greatest return at the end of this financial year, we’ve have five top tax tips. This week we’ll showcase the PAYG employees.
Top 5 for PAYG
Know what you can claim
As a salaried employee, you’re entitled to claim deductions for a range of expenses. Most expenses will directly relate to generating your income. Think about the expenses you incur through the year: vehicle and travel expenses, clothing and dry-cleaning expenses, charitable gifts and donations, home office expenses and self-education expenses, are some but not inclusive. Of course, to claim these work related expenses the cost must have been incurred in the course of your work and you have not been reimbursed by your employer. By knowing exactly what you can and cannot claim, and having the records to prove it you will be able to secure a better tax position.
Keep your receipts
The expenses must be related to your job and you must have the record to prove it. The ATO (Australian Tax Office) now has an app for Apple and Adroid that allows you to easily capture expenses, photograph receipts and keep accurate records through the year. The myDeductions tool makes it easier and more convenient to keep your tax deductions and income records all in one place. For more information click here
Get your insurance in order
Before the financial year comes to a close, you need to make sure you have adequate private hospital insurance cover in place. Singles who earn over $90,000 a year without private hospital insurance will be charged a Medicare Levy Surcharge. Depending on how much you earn, the Medicare Levy Surcharge could cost you thousands of dollars each year.
Rental property claims
If you own a rental property, you can claim appropriate capital works and capital allowances (depreciation) deductions. Your accountant will identify exactly what you are able to claim as a property investor. A quantity surveyor can then help you prepare a depreciation report that outlines the amounts you can claim in your tax return every year.
Salary sacrificed super contributions
Heading into the new financial year, you should contemplate the value of making salary sacrificed super contributions. Salary sacrificed super contributions offer a simple way to save on tax and build wealth. It involves having part of your before-tax salary paid into your super rather than taking the money as cash in hand. These contributions are taxed at 15%, which is likely to be below your marginal tax rate (which could be as high as 46.5%), so more of your money goes towards growing your super rather than paying the tax office.
Next week we will capture the top 5 tax tips for small business owners. If you have any questions speak to your accountant for taxation advice or your local mortgage broker for general finance advice.