June 01, 2017 Five ways you can bolster your tax return before June 30
Mention the word tax, and it typically draws a grumble from most people, even a sense of grievance.
And fair enough.
Most Australians feel like they pay too much tax, generally speaking, and often don’t have a whole lot in the way of expenses they can claim to help bring their taxable income down.
I’m all for paying my fair share of tax.
That’s a given.
But, with a young family to consider, I’m equally conscious that I claim everything I possibly can – all within the rules and regulations of the tax system, of course – particularly with June 30 just around the corner.
It’s all about making some timely decisions.
Now, I won’t cover all the obvious ones – we’re talking potential deductions for home-office expenses, car allowances, health insurance and the like.
But there are a few timely decisions you can make right now that may help to bump up your return a bit.
Here are five ways you can bolster your tax return:
I’ll start with super. If you have a young family like me, there are three things you should consider…
Let’s say your partner’s a stay-at-home parent or is working part time. Here, you can contribute to their super and claim an 18 percent tax offset (up to contributions of $3K).
It might be worth speaking with your employer about sacrificing part of your salary into super. For example, if you earn $90K a year, sacrificing, say, $5K into super will save you $1,100 in tax. That said, it all depends on your circumstances.
Again, depending on your circumstances, you may be eligible to receive a co-contribution from the Federal Government towards your super.
Food for thought.
I routinely look to donate to various charities where I can throughout the year.
Speaking subjectively, giving something back’s important – it’s a good thing. The act of giving aside, the flip side of making a charitable donation is that it’s tax deductible. For me, it’s a win-win.
Just be sure to keep the receipts.
If you have an investment property, now’s the time to get any outstanding maintenance or repairs sorted out, as you can claim all the associated expenses immediately.
Things like servicing and maintenance of gas and hot-water systems, smoke detectors, gardening, cleaning, lawn mowing, pest control, you name it (well, within reason – be sure to check with your accountant first!).
In speaking with Katie Bryan, an Accountant friend of mine from Propeller Advisory, she said:
“I’d highly recommend getting a tax depreciation schedule prepared by a quality surveyor, as you can claim capital works deductions on the structure and items of the building that are considered ‘fixed’ to the property, while depreciation can be claimed on any plant and equipment assets claimed within it”
Namely, things like income-protection insurance.
As long is it’s not paid from your superannuation, it’s tax deductible.
If you’ve been paying it monthly, now’s the time to opt for an annual policy and pay it before June 30. Meaning, you claim the maximum deduction for this financial year’s return.
Shares and other investments
If you’ve been sitting on a few poor-performing shares or investments, it might be worth moving on and selling them. Here, you can offset the losses on each against any capital gains you’ve made on other investments over the past financial year.
Taking Katie’s advice again, she said:
“In limited circumstances, you can make an immediate deduction for non-business prepaid expenditure – interest on a loan relating to an investment property or your share portfolio, for instance.”
As I said, everyone’s circumstances are different.
That said, I’m amazed as to how many people I’ve come across who could claim a combination of the above, but had no idea they could.
If you feel any of these do apply and you want to have a quick chat before speaking to your accountant, give me shout.
Disclaimer: all information contained within this article is of a general nature. It does not take into consideration your personal financial circumstances. Please consult a professional financial adviser (just like us 🙂 ) when making a financial decision.