With the new financial year already upon us, many people will now be thinking about lodging their returns. For many it can be a time to get back some hard earned cash, whilst some will have to pay extra tax. Either way, making the most of your tax return can save you some serious money, so we have come up with some very handy tips to employ in order to give you the best return possible.
1. Lodge Early
It can be a daunting task, rounding up all of the documents together to give to your accountant or even for you to complete your own return, but getting it out the way earlier rather than later can save you money. The longer your refund is with the taxation department, the more interest you will lose, so get it done early and make the most of it.
2. Claim all deductions
Most of the common deductions are interest on loans, income protection premiums and some work related expenses, but it’s the not so common ones which can save you thousands. Gift receipts paid throughout the financial year to charities can also be claimed as a deduction, so be sure to keep all receipts. For a full list of deductions allowable, the ATO website is a great source of information.
3. Take out private health insurance
Taking out private health insurance can make you eligible for a rebate or offset depending on your income. If you took our private health insurance for the last financial year, the rebates and offsets will be calculated on how many days you held the cover for. Being eligible for a rebate or offset in your Medicare Levy can save you a significant amount of money. If you didn’t have cover for the last financial year, get in early and take out private cover now, to maximise the benefit for the 2015/16 financial year.
4. Increase your Super
Taking advantage of salary sacrificing a portion of your income straight into super is a great way to reduce the amount of tax you pay. As the sacrifice amount goes straight into your super fund before tax, it reduces the amount of taxable income you have, while increasing the funds you have access to later in life. Salary sacrificed contributions are taxed at a rate of 15%, which in most cases will be far lower than your marginal tax rate. Salary sacrificing into super isn’t for everyone, but it can be a great way to save with the future in mind. More information can be found on the ATO website, including the limits for how much is allowable each year.
5. Claim against your investment property
Property investment is popular among the many Australians, but making the most out of your investment property for tax reduction isn’t. Deductions can include, but aren’t limited to advertising for tenants costs, cleaning costs, interest repayments, home loan fees and depreciation on your property. With the range of deductions so large, it is worth seeking advice from your accountant about exactly what can and can’t be claimed.
If you would like to put your tax return to good use by getting into the property market, please give Steve a call on 0433 124 081 or email at email@example.com and he would love to assist you in reaching your financial goals.
This article is based on general purposes only and any individual matters should be lodged with an independent, registered tax agent. These taxation laws are subject to change at any time.