By Fiona Mackenzie-Ross, Mortgage Choice South Melbourne
Tax time is a great time for some and a painful time for others. What can you do to take back your tax time rebates, deductions and claims? Here are the top 10 most helpful tax tips to get you through tax time.
1. Make a donation to a charity
As bad as it sounds... YES, you can get donations back as long as you ask for a tax receipt and the donation is made by June 30.
2. Deductions and Income
Rule of thumb - deductions are claimed by the highest income earner and income claimed by the lowest. For an interest bearing account, this should be in the lower income earners name with both incomes being deposited here (noting both as signatories).
3. Log books are up to date
Logbooks for your car need to be less than 5 years old.
4. Working from home
Track your hours, phone usage and internet usage. Work no longer means sitting at a desk all day, some roles now require us to be at home. Even our lifestyles (working parents), can now have flexibility with their jobs.
5. Claim everything you are entitled to
The most famous word at tax time - RECEIPTS!! Keep them. You might not know if you can claim it. When in doubt, keep it. If you work out doors you can claim SPF sunscreen, lip balm even SPF foundation. Make sure you know what you can claim.
6.Credit card/Eftpos your expenses
Many people don't know this (the ATO won't actively tell you either), however the ATO recognize your bank statements as a form of proof of purchase. Make sure you keep these statements, don’t throw them away! Make it easy on yourself at tax time.
7. Rental Property
If you have been lucky enough to obtain one of these delights you have a whole new world of taxable deductions. The first thing you need, and if your property is less than 40 years old, is a Depreciation Schedule. If you don't have one, spend the $600 odd dollars and get one. You can also prepay interest for 12 months on your rental property, this reduces your taxable income. Always get financial advice from your account where possible.
8. Capital Gain
If you have some poorly performing shares think about selling them prior to June 30, so that your capital loss can offset some, if not all, of your capital gain.
9. Employee share schemes
This will only apply if you work for a publicly listed company that may have an employee share scheme. Do make yourself aware that this is a form of intangible income and you still get assessed on it. Make additional adjustments with salary sacrificing to your super, increasing your deductions or deferring other income if possible.
10. Organise Insurance
Yes, most of us yawn when we hear the word insurance. We think we’re covered... but a lot of us are not. What happens if we're playing around with the kiddies in the back yard and break and ankle and can’t work for a period of time, and you don’t have any sick leave? Income Protection Insurance is tax deductible and covers you for life's unexpected mishaps. It can also be taken out of your Super.