This one of the most popular questions during tax time.
If you don’t want to come to your accountant and ask the same question. Get ready for your tax returns this coming financial years to avoid “paying too much tax”
Here are the 5 tips to boost your tax refund
1) Declare your income
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Your income statement will show the income you have earned through your employer(s). JobKeeper payments are treated as your normal taxable income from your employers and Centrelink respectively and will be included by the ATO in your tax return
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Income protection, sickness and accident insurance payments, redundancy payments, leave payments are also included in your tax return
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If you have received access to your superannuation due to Covid-19, you will not need to pay tax on these amounts and will not need to include these payments in your tax returns.
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Tip: If you don’t include all your income, there might be a chance the ATO will pick it up and send you an amended Notice of Assessment with additional tax to pay plus interest. So it is important to include all your taxable income during the financial year.
2) Keep all tax receipts for work related expenses
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You need receipts for tax deduction claims, you cannot claim tax without having adequate receipts, your tax deductions will be rejected, and you will end up paying more tax than you have to.
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The best way is to regularly collect all your tax receipts, take photos and put them all in a folder ready to send to your accountant.
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Tip: Think about it as your discounted voucher or cash rebate for what you have spent. It will give you more motivation to do it properly.
3) Make sure you claim all tax deductions
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A rule of thumb is that if any expense relates to your earning income, then it will be likely tax deductible.
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From general expenses e.g. Tax agent fees, income protection, private health insurance, donations
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For work related expenses e.g. tools, professional membership fees, computer, phone, software etc..
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And Home office expenses e.g. office equipment, desks, chairs, stationery etc.
Tip: If you are unsure of what you can claim, keep your receipts anyway so you can check with your accountant when you do your tax return.
4) High income earner? Obtain private health cover
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if your income is more than 90k for single and 180k for family as you need to pay an extra 1% Medicare levy surcharge. It might be more expensive than a basic private health cover.
5) Find a tax accountant who is up to date with Tax Law
Tip: Treat the fee you pay your qualified accountant as an investment instead of a cost as the fee is usually low compared to what you might be missing out when you are unsure of what to claim in your tax return.
