Are you looking for ways to maximise your tax refund? Then be sure to read on and follow these seven easy tips!
As tax time approaches, many Australians start to feel the pressure of gathering documents and making sure everything is in order. However, this period can be a great opportunity to maximise your financial outcome if you approach it strategically. Here are seven easy tips and considerations to keep in mind to ensure you get the most out of your tax return:
1. Keep Accurate Records
One of the most critical aspects of preparing for tax time is keeping accurate and detailed records throughout the year. This includes receipts for deductible expenses, records of income, and documentation for any investments. By maintaining organised records, you can ensure you don’t miss out on any deductions and can substantiate your claims if the Australian Taxation Office (ATO) has any queries.
2. Understand Deductible Expenses
Understanding what expenses are deductible can significantly impact your tax outcome. Common deductions include work-related expenses such as uniforms, travel, and tools, as well as self-education expenses if they relate to your current employment. Additionally, you can claim deductions for charitable donations, investment expenses, and home office costs if you work from home. Make sure to check the ATO’s guidelines to understand the specifics of what can be claimed.
3. Review Investment Performance
Tax time is also an excellent opportunity to review your investment portfolio. Capital Gains Tax (CGT) is payable on profits from the sale of assets like shares and property, but you can also offset gains with capital losses. If you have investments that have not performed well, consider selling them to realise a capital loss, which can reduce your overall tax liability.
4. Contribute to Superannuation
Making additional contributions to your superannuation can be a tax-effective strategy. Concessional contributions, such as salary sacrifice and personal contributions for which you can claim a tax deduction, are taxed at a lower rate of 15%. This can reduce your taxable income and boost your retirement savings. Be mindful of the contribution caps to avoid excess contributions tax.
5. Consider Tax Offsets and Rebates
There are various tax offsets and rebates available that can reduce your tax liability. For instance, the Low and Middle Income Tax Offset (LMITO) can provide significant savings if your income falls within the eligible range. Additionally, if you’re eligible for the Private Health Insurance Rebate or the Seniors and Pensioners Tax Offset, make sure to claim these to reduce your taxable income further.
6. Seek Professional Advice
Tax laws can be complex, and everyone’s financial situation is unique. Seeking advice from a registered tax agent or accountant can help you navigate these complexities and ensure you’re taking advantage of all available deductions and offsets. A professional can also help you with tax planning strategies to optimise your tax position not just for this year, but for future years as well.
7. Lodge on Time
Finally, ensure you lodge your tax return on time to avoid any penalties or interest charges from the ATO. For most individuals, the deadline is 31 October if you’re lodging your own return. If you’re using a registered tax agent, you may have a bit more time, but it’s essential to engage with them early to ensure your return is lodged promptly.
By keeping these considerations in mind, you can maximise your outcome at tax time and take control of your financial future. Being proactive, organised, and informed can make tax time less stressful and more rewarding. Happy tax time!
Tax time has returned – so we’re here to help you plan and prepare for the end of financial year with these 7 Helpful Tips for Australians to Prepare for Tax Time. And here are 5 Weird Things Australians Can Claim On Their Tax Return!
