End of Financial Year is almost here and you know what that means? A potential tax return could be heading your way. Before you start thinking of ways to spend that extra cash, here are our top tips to help you prepare for EOFY.
Get your docs sorted, stat.
You’re probably already aware of the obvious, like payment summaries and bank statements, but what about the rest? Don’t forget to include shares, unit trusts or managed funds statements, your private health insurance policy statement, records from your rental property, and any foreign income.
Leave it to the ATO
Most of your details will be pre-filled by the ATO by mid-August, making the whole process smooth sailing for you. If you lodge your tax return before then, you will need to make sure you declare all your income, including income from pensions, investments, crowdfunding, and the sharing economy such as Uber or Airbnb.
DIY is simpler than you think
Lodging your tax return yourself may seem overwhelming, but it can be very straightforward – and free! To use the ATO’s myTax online system, all you have to do is create a myGov account and link it to the ATO. If your tax return is more complex, a registered tax agent (i.e an accountant) can prepare and lodge it for you for a fee. Registered tax agents are the only people allowed to charge for this.
Claim what’s yours
Don’t let work-related expenses go unclaimed, or you could be missing out on additional $$ in your tax return. The types of work-related expenses you could claim include:
- Some vehicle and travel expenses.
- Clothing, laundry and dry-cleaning for uniforms and occupation-specific clothing like chef’s pants or safety vests.
- Gifts and donations to ATO-endorsed organisations.
- Home office expenses such as computers, phone and internet (but only the proportion that you use for work).
- Study that’s relevant to your current job.
- Books, magazines and other subscriptions that’s relevant to your current job.
- Protective gear and equipment.
- Personal super contributions.
It’s important to speaks to an accredited accountant to get a clear understanding of what you could claim for.
Boss your taxes next financial year
There are heaps of apps available that help you keep track of expenses and lodge receipts. MyDeductions is a free record-keeping tool within the ATO app. You could make it your new financial year’s resolution to download it and keep on top of your finances. You’ll be high-fiving your past self next financial year.
A super tip to boost your return
Pre-tax super contributions can lower your taxable income, so take advantage by contributing what you can but keep in mind there is concessional contribution cap threshold. The combined total of your salary sacrifice, employer contributions and other voluntary pre-tax contributions cannot exceed the concessional contribution cap threshold of $25,000. Salary sacrificing may sound like a bad thing, but it can be very smart, so talk to your employer about it. If you have a financial advisor, you can also speak to them for more info on this and other super strategies you can take advantage of.
You can also make personal after-tax super contributions (i.e. non-concessional contributions) and claim a tax deduction later. To do this, you’ll need to complete a form called a ‘Notice of intent to claim or vary a deduction for personal super contributions’ and give it to your superannuation fund. Catchy name, right? To learn about the requirements around making a deduction for personal super contributions and what to do with the notice of intention after completing the form go here. With Living Super, you can complete the form online by logging in. Speak with an independent financial planner if you need support.
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