The end of the financial year is fast approaching. Here’s what you should be spending on now to ensure you get the most out of your tax return.
Get the most out of your tax return with these simple tips.
Every year, the list of possible tax deductions seems to get shorter – but the good news is there are still quite a few things you can legally claim to maximise your annual tax return.
The latest data from the Australian Taxation Office shows that the 6.1 million-plus people who completed individual income tax returns spent an average of $371 on advice in 2011-12. Individuals devoted an average of 4.6 hours to managing their tax during the period.
Our tip is to not spend more money unless you have to – but if you have to, make it tax deductible.
With that in mind, here are some hot tips on what you might be spending on before June 30 to maximise your annual tax return.
1. Deduct the max
Find out deductions specific to your job and maximise your spending now. If you’re in a trade, buy new tools. If you’re a professional, look at buying a new laptop for under $500.
You can also buy or subscribe to publications relevant to your industry, such as medical journals or magazines. This also goes for professional association memberships.
2. Make contributions to super
If you have cash to spare, here is a radical idea: If you haven’t already reached your maximum contribution limit of $25,000 if you’re under 60, you could potentially salary sacrifice all or some of your June pay into super.
Even though it won’t attract a big tax deduction in one month, starting to salary sacrifice into your super – you’ll save on tax as well as increasing your retirement funds.
If your annual income is less than $50,000, then you may be eligible for the government’s super co-contribution scheme. If you earned less than $33,516 in 2013-14, then the government will kick in an additional $500 when you put $1,000 of your post-tax income into super as a non-concessional contribution. Above this income threshold, the government will reduce the co-contribution amount on a sliding scale for those earning up to a maximum of $48,516.
Likewise, couples may qualify for a rebate of up to $540 in situations where one spouse earns less than $13,800 a year and the higher-earning spouse contributes to their partner’s super.
Now is the time to pay income insurance premiums and pre-pay interest on tax-deductible loans for investments. Likewise, stock up on business consumables – such as paper, pens, toner and printer cartridges – to get the most money back.
If you’re considering further study, you might be able to squeeze in a course or conference before the end of the financial year. The study has to be directly related to your income producing capacity, but let’s say you’ve done a course to improve your employability, [then] you might be able to claim that as well.
5. Delay income
Right before the end of financial year is one of the only times a financial adviser will recommend turning away money, albeit temporarily.
If you’re in line for a bonus, ask for it to be delayed until the new tax year. He
Also says consider delaying if you get leave loading for annual leave.
If you’re about to sell shares, investments or your house, it might be worth delaying the capital gains until July. If you can’t delay the capital gains, looking to other investments where you may have suffered a capital loss so you can offset the gains
If you’re planning to donate to your favourite charity, but haven’t got around to it yet – then now is the time to get your philanthropic hat on.
7. Log book
If you use a car (for 90 days), a home office or a mobile and/or home phone (for one month) for professional purposes, you should start keeping a log book so you can improve your deductions.
8. See your accountant
Seeing your accountant might sometimes seem about as much fun as visiting the dentist, but it’s a good idea to make an appointment before June 30 as you can claim the fees as a tax deduction.
9. Health insurance
If you don’t have it already, sign up to health insurance now to avoid the Medibank surcharge – up to 1.5 per cent of your income on top of the 1.5 per cent paid by everyone. Call us for advice on this Heart Health Insurance Brokers 1300 861 143.