End of Financial Year Tips
The end of the financial year is just around the corner and if that gives you feelings of trepidation, do not worry we have a few tips that can act as a good starting point.
1. Find A Trusted Accountant
A qualified accountant can help maximise your tax return as they know all the ins and outs and won’t leave any stone unturned. They can make suggestions on deductions that you may not have been aware you were eligible for, or that you might have otherwise missed. The fee you pay for an accountant’s service is tax deductible.
2. Organise Your Receipts
It’s time to sort out your receipts so you can make your tax deductions. These days, some major retailers offer digital receipts so if you have lost the original, contact them as they may be able to retrieve a copy for you.
3. Have You Been Working From Home During COVID-19?
During the COVID-19 situation that we are still currently in, many individuals have been working from home and may incur expenses, some of which you can claim at tax time. If you work from home, you may be able to claim a deduction for the additional running expenses you incur including:
Electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
Cleaning costs for a dedicated work area
Phone and internet expenses
Computer consumables (for example, printer paper and ink) and stationery
Home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 or decline in value for items over $300.
4. Know What You Can Claim Tax Deductions On
Knowing what you can claim can be quite tricky, but it’s important that you take time to look over what you can and can’t receive tax deductions on. You can find out via the Australian Taxation Office (ATO) and your accountant can help you out to make sure you’re not missing out on anything you might have overlooked.
5. Look Out For Scams
There’s no shortage of scams around tax time so be vigilant and always verify the source if you receive anything you’re unsure of. Examples of scams include emails purportedly from the ATO asking you to complete a tax refund review. Scam emails typically include poor grammar, a false email address, and they do not specifically address the sender. You can always verify the legitimacy of emails by contacting the ATO and always look for an @ato.gov.au account.
6. Embrace Your Charitable Side
If you’ve been donating regularly to charity or would like to make a one-off gift to an organisation you support, you can claim a tax deduction. Donations over $2 are tax deductible so this means you can do some good and help reduce your tax.
7. Contribute To Super
The end of the financial year is a great time to boost your super account. If you have any additional savings, putting this towards your super offers a number of tax benefits. If your spouse or de facto partner is unemployed or earning low income (under $13,800 p.a.), you can make a super contribution on their behalf and you could qualify for a tax offset.
8. Make The Most Of Your Investment Property
As a property investor, you should be sorting out your paperwork so you can make the most of the deductions available to you. Gather all receipts for common expenses such as advertising for tenants, cleaning costs, council and water rates, and electricity and gas. If your property requires some repairs or renovations, now’s the time to have these done as they are tax deductible. You should also spend time reviewing what costs you need to keep or cut. For more information on what you can claim read more at ATO.gov.au.
The end of the financial year is a busy period but by preparing early you can minimise the stress and potentially nab some extra cash in your pocket.
If you have any questions about your financial situation, how you can achieve your goals or protect your family, speak to My Finance Network, today.