With the arrival of the new financial year many of us are locking down appointments with our accountant in the hope we jag a good “mid-year bonus”. This period is the perfect time to get your finances in order and start creating good financial habits.
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. 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.
In addition to knowing what items are claimable, 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 every year is to create a place where you store all of your receipts. Get into the habit of throwing all of your tax receipts in one place. I use a shoe box (or two). This 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.
Step 2: Include everything
Once you know exactly what you can and cannot claim, 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.
Step 3: Give yourself plenty of time
While your tax return isn’t generally due until October each year, 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.
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.
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