15 Often Overlooked Tax Return Tips to Sky-Rocket Your Savings

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There’s nothing like a hard deadline to kick you into action.

With the end of the financial year looming, time is ticking for you to get your affairs in order so you can maximise your tax return.

You’d love an enormous return. A windfall that enables you to do the fun things you thought you couldn’t afford.

But the mention of tax sends shivers up your spine. What if you claim too much, and the ATO starts asking questions? A terrifying thought. You’re an upstanding citizen and only want to do the right thing.

So it’s easier to play it safe – isn’t that what most people do?

No, it’s not. The wealthy ones don’t. Nor do the smart ones. They arm themselves with information, keep accurate records and claim every dollar they’re entitled too.

And you can too.

Try these simple tax return tips to ensure you’re not giving money away when you don’t need to.

Tax Deductions You May Be Missing Out On

1. Gifts and donations

You can only claim a tax deduction for gifts or donations to organisations that are registered deductible gift recipients (DGRs).

Gifts must be:

  • Truly be a gift. A gift is a voluntary transfer of money or property where you receive no material benefit or advantage.
  • Money or property, which includes financial assets such as shares.
  • Comply with any relevant gift conditions. For some DGRs, the income tax law adds extra conditions affecting the types of deductible gifts they can receive.
  • 2. Car and travel expenses

    Vehicle and other travel expenses directly connected with your work can be claimed. But generally, you can't claim for normal trips between home and work.

    3. Home office

    If you’re running a business from home, you may be able to claim deductions for home expenses including a computer, phone or other electronic devices you are required to use for work purposes, as well as a deduction for running costs.

    If you’re an employee and required to use your computer, phone or another electronic device for work purposes, you may be able to claim a deduction for your costs.

    4. Self-education

    You may be able to claim a deduction for self-education expenses if your study is work-related or if you receive a taxable bonded scholarship. In some circumstances, you have to reduce the amount of your claim by $250.

    5. Clothing, laundry and dry-cleaning expenses

    You can claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing, and unique, distinctive uniforms.

    To make a deduction you may need to have written evidence that you purchased the clothing and diary records or written evidence of your cleaning costs.

    6. Deductions for specific industries and occupations

    There are a number of industry specific tax deductions you may be eligible for such as equipment and events specific to your industry. Be sure to investigate your eligibility and find out what records you need to produce in order to claim them.

    Tips to squeeze even more out of your return

    7. Prepay tax-deductable expenses

    Provided the pre-payments are less than $1,000, items you can prepay to bring them forward into this year’s claim include:

    • Gifts and donations to registered charities
    • Self-education
    • Subscriptions
    • Income protection insurance
    • Union fees and subscriptions to associations
    • Work-related expenses such as tools and equipment
    • Career-specific expenses
    • Health insurance (avoid the Medicare levy)
    • Superannuation payments (self-employed or by salary sacrifice)

    How to maximise tax deductions for an investment property

    The more deductions you can claim on an investment property, the higher the tax benefit. If you own an investment property, you can claim:

    8. Running expenses

    Body corporate fees, council rates and charges, cleaning, gardening, lawn mowing, pest control and travel undertaken to inspect or maintain the property.

    9. Interest

    If your property is negatively geared, interest is quite possibly the largest tax deduction you can make. If your property is available for rent, any interest on money borrowed for the property is tax-deductable.

    10. Bank fees

    If you pay an annual package fee or monthly account keeping fees, these fees can be claimed as a tax deduction.

    11. Borrowing costs

    Borrowing costs such as loan mortgage insurance, government fees and application fees can claimed as a tax deduction over five years.

    12. Refinance or break costs

    If you’ve refinanced your loan and paid it out, any break costs can be claimed as a tax deduction. Remember though that any unclaimed borrowing costs may also be claimed in the year your loan was refinanced.

    13. Tenancy costs

    Fees such as advertising for tenants, letting fees paid to property managers and lease preparation costs are all tax-deductible.

    14. Repairs and maintenance

    You can claim a tax deduction for the cost of restoring something to its original condition due to wear and tear by the tenant. Remember, the damage must not have existed when the property was purchased.

    15. Depreciating assets

    Whilst not a cash expense, depreciation is definitely worth claiming. Depreciating assets each have a set percentage of the total cost that can be claimed over their lifespan. This includes kitchen assets, carpets, tiles, white goods, light fittings, air conditioning units, fire alarms and building costs.

    Ready to claim every dollar you’re entitled to?

    Tax time needn’t cause a headache. You just need to invest a little time to think about the items you can claim deductions for. It’s also the smart thing to do if you want to build your wealth.

    All you need to do is book some time into your diary this week to spend 30 minutes assessing areas in which you can claim deductions. Then, you’ll have plenty of time to gather the records you need to make tax time easy.

    Remember, talking to an experienced tax consultant will ensure you do everything by the rules and claim every dollar that’s yours.

    So get your diary out and make tax time a priority today. The 30th of June is only weeks away.

    If you have any questions about the COVID-19 Disaster Payment, feel free contact our office on 02 9223 4378.

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