Are you missing out on your hard-earned money? When you are trying to maximise your tax return, many people fail to take advantage of potential deductions either through not knowing or simply being disorganised.
With the average tax return in Australia being around $2,574, learning how to increase the amount in your pocket is a great way to make the most of your refund.
How do you get started, especially if you’re not a tax professional? Getting tax-time ready nowadays is a lot easier than it used to be. By using a few simple apps and getting familiar with the basic deduction rules, you’ll significantly reduce the stress (and time) that goes with getting your financial life together.
We’ve come up with 8 essential tax tips to make submitting your tax return easier once 1 July rolls around. Make sure you’re not giving up any more of your hard earned money than you have to!
1. Determine Your Tax Bracket
The first way to maximise your tax return is to make sure you work out your tax bracket accurately. Without knowing your tax bracket, you won’t understand the full extent of your tax obligations.
The tax brackets aren’t always the same year-to-year. Take a few minutes to review the individual and married income tax rates from the Australian Taxation Office to get an understanding of where you stand. Once you know your tax bracket, you’ll also be in a better place to review your deductions.
2. Create a Receipt System
If you’re stuffing your receipts into a hidden drawer or a giant envelope, you’re not alone. That being said, there is a better way. Receipts are something that are very easy to lose so you have to establish a system. Also, sometimes the ink can fade over time and you end up with a blank piece of paper!
Tracking and saving receipts is one of the best ways to save money during tax season. You’d be surprised just how many things you can claim that you might not have even known about.
Moving forward, you should try to file away every relevant receipt and talk to your accountant to find out exactly what you’re able to claim. Thankfully, there are now apps available that help you to digitise receipts if you prefer a modern solution to keeping them safe.
3. Make a Charitable Payment
Doing good is always something to be proud of, but did you know it could also pay off during tax season? Making a charitable payment is a great way of reducing your taxable income and doing a good deed at the same time.
To help you get ahead in the next EOFY, you could always consider setting up a monthly donation to a charity of your choice. It feels great to give back!
4. Review Your Deductions
Although this seems like one of our more obvious tax return tips, it’s surprising how many Australian workers fail to claim their deductions. There are all kinds of things that you can claim during tax season such as:
- Business travel
- Work training events
- ATO interest
- Educational courses
- Work-related supplies
The list goes on, so be sure to check with ATO to see what you qualify for. In addition, working with a tax specialist can help you claim all of your possible deductions.
5. Home and Car Expenses
If you drive your car to work or have a home office, there are some additional expenses you can claim. Why is this? When you use your car for work or dedicate a room in your home for your office, you’re taking on a cost of running or working for a business.
First, you’ll need to create a strategy for calculating your car allowance. The most common method is to use a mileage tracker app to calculate costs and distance throughout the year. In addition, you might be entitled to claim a number of your home office expenses such as equipment, utilities, and so on. Again, tracking and keeping receipts is key.
6. Travel Expenses
While you can’t write off your family trip to the beach, you might be able to qualify some of your travel expenses. Mainly, we’re talking about work travel. If your employer requires you to travel for work, you can deduct a number of expenses, especially if you stay overnight. You can even deduct meals as long as your employer isn’t also reimbursing you.
7. Get Paid to Read News and Magazines
Do you read an industry magazine or journal online? You might be entitled to a deduction. If you subscribe to an online or offline publication that helps you stay up to date in your line of work, and you can show a direct link to the subscription and your assessable income, then it’s highly likely you can claim a deduction.
For example, a chef or Maître d’ subscribing to a food magazine, or a writer or journalist subscribing to online news sites would both make the cut. The good news is if the subscription cost you less than $300, you can claim an immediate deduction.
8. Put Your Money in a Super Fund
Super contributions might be one of the best ways to make the most of your tax return. This is especially true for workers who earn less than $52,000 a year. For each 1$ put into your super, the government will contribute 50 cents.
In addition, if you’re married and one partner makes less than $40,000, the higher earning partner can contribute up to $3000 to the lower earning partnery’s super fund. This results in a tax offset of 18 percent. This is a kind of saving that really pays off in the long run!
Start Preparing for Tax Season
Maximise your tax return with these tips above. Whether you’re hoping to save money towards a family holiday or your debt payoff plan, making the most of your yearly tax return can help you reach your goals faster.
If you’re feeling overwhelmed by your tax return and you’re not sure how to move forward, Debt Busters can help. Give us a call at 1300 368 322 to get started. At Debt Busters we’ve been helping Australians out of debt for over 15 years and we can help you too.