Take a look at five ways to make the most of tax time this year.
Sort your work-related expenses
Tax time is a great opportunity to claim back some of the money you’ve spent as part of your job, and there’s a whole range of work-related costs you may be able to claim; like sun protection for outdoor workers, the cost of buying and laundering work uniforms, even union fees and professional subscriptions.
You’ll need to have receipts if your work-related costs total more than $300. And you can’t claim a cost that’s been reimbursed by the business.
Don’t overlook electronic devices either. It’s a fair bet you’ve got a smart phone, a tablet - maybe a laptop computer. We often use these gadgets as part of our job, and that could mean you’re able to claim part of the cost in this year’s tax return.
Stick to the rules though. You need to keep a diary for four weeks that shows how much of the cost of electronic equipment relates to work – versus private use. It may be a hassle but it could mean a bigger tax refund.
Add up work from home costs
These days plenty of us spend at least part of our week working from home. If that sounds like you, chances are, you may be able to claim a tax break for home office expenses – like part of your phone or internet bills, or depreciation of home office equipment like a desk or computer.
Have your health cover in order
Before the financial year ends, make sure you have adequate private hospital insurance cover in place to avoid the Medicare Levy Surcharge (MLS).
The MLS applies to singles earning over $90,000 annually or families with a combined income of $180,000, who don’t have private hospital insurance. The MLS can be as much as 1.5% of your taxable income, and it comes on top of the standard 2% Medicare Levy.
Paying the MLS won’t see you entitled to additional health benefits, and depending on your income, it can work out cheaper to have private hospital cover.
Property investors – don’t be short-changed on depreciation. Landlords are entitled to claim for a wide range of property-related expenses including repairs and maintenance. So, check curtains, blinds, window screens, taps and carpets for wear and tear and see if anything needs fixing.
Don’t forget to maximise your depreciation claims. It’s estimated 80% of investors fail to claim their full depreciation entitlement yet on average, investors can claim between $5,000 and $10,000 in depreciation deductions in the first financial year alone. The best way to claim maximum depreciation is by having a tax depreciation schedule prepared by a quantity surveyor. The cost (usually between $650 and $7002) is 100% tax deductible.
Consider salary sacrificed super contributions
Heading into the new financial year, it’s worth thinking about making salary sacrificed super contributions. This is where part of your pre-tax income is paid into your super fund rather than being received 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.
Making the most of tax time calls for some prior planning including gathering together all your financial documentation. Having the paperwork on hand also makes this the ideal time to book an appointment to see an adviser. It can mean putting strategies in place to better manage next year's tax bill while building wealth.
Call Suzanne or Costa in the office on 02 9517 1818, or email email@example.com to discuss your options. Or, if you feel like dropping in at our office, we are now located at 557a King Street, Newtown NSW 2042. Be sure to share our blog on Facebook and let others join the conversation!