Tax return time can be a good or bad time of the year, depending on how you’ve managed your finances — for some it can be like a small lottery win, and for others it can mean a big bill. The result doesn’t have to be left to chance. By knowing how to manage your income, and what you’re spending on, investing in and donating to, you can ensure that you receive a cheque, rather than post one in July.
Tax accountants are a great help when it comes to preparing yourself for tax time. Make an appointment with your accountant and seek advice about the best ways to increase your tax return — learn what is tax deductible, what is a write off and what will increase the tax you need to pay.
How to make the most of your tax return
– Claim everything you can. Be aware of all the normal areas you can claim on, especially as they pertain to your job. Know if you can claim laundering services, stay on top of any costs you may incur as a result of using your car for work (you will need to use a log book for this), and use of your personal phone or internet. Some of these amounts can be difficult to determine, the Australian Tax Office website can help, and your accountant will also be able to explain how it works in detail.
– Education. Part of the cost of education you undertake that pertains to your work can be claimed, as can industry books or magazines that help you perform or know more about your industry. The details on what you can claim are on the ATO website — ensure you don’t miss out on a valuable claim by forgetting education costs.
– Second job or freelance work. Sometimes we undertake work that is not our usual job — such as freelance writing, mowing lawns or other contracting or temporary work. If your employer isn’t withholding your pay as you go tax, ensure you make voluntary payments so you don’t receive a bill at the end of financial year.
– Regular voluntary payments. Do you have trouble saving? Voluntary payments can be a great way to save additional money by putting it somewhere you have no access it for the entire year. Speak with your HR or payroll team and ask them to take an additional amount of tax out each pay day, so when July rolls around you will not only not receive a bill, but likely, will receive an impressive cheque.
– Charitable donations. Donating to charity is a great thing to do, knowing you’re helping people in difficult circumstances is very rewarding. Donations are also rewarding at tax time because they are tax deductible. Ensure you get a receipt for all donations and have it available when filling in your tax return.
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