Tax Tips & Tricks To Maximise Your Return

The processes for filing tax returns remain largely unchanged, notwithstanding the world in which we currently live.

Certain details will be required before we can discuss your tax return with you. In fact, a lot of the "paperwork" is now handled by pre-filling, and if you wait until late July or mid-August, the ATO's systems will probably be able to supply the majority of the information from employers, banks, governments, and other third parties.

After that, we can verify the accuracy of the data once again and enter any deductions you choose to make. Nevertheless, in order to be comprehensive, please review the material below before contacting this office to discuss your tax return.

Tax Return Tips

Super Trouper

You have $10,000 in extra cash, but your employer has only contributed $7,000 to your superannuation fund since June 30 of last year. According to new regulations, you can donate that $10,000 to super and deduct it from your taxes. The funds must be registered in your fund's bank account by no later than next Saturday evening, so contact your fund as soon as possible to obtain the proper documents.

Super Spouse

After the implementation of new regulations on July 1, individuals with stable salaries can now claim a tax credit for donations made to a low-income spouse's super fund. Contributions to the super fund of a spouse making less than $37,000 or less are eligible for the full $540 tax offset. The offset gradually disappears after a spouse's income reaches $40,000 per year. Due to the fact that a refund reduces the amount of tax owed, it is at least twice as useful as a deduction.

Get Smarter

Education relevant to the workplace is one of the finest strategies to increase your employability. The education must, however, increase your specific abilities or information needed for your existing employment or probably result in higher compensation in your current gig in order for expenses totalling more than $250 to be tax deductible. Kosher expenditures that have been paid in advance may be included for 2017–18.

Subscriptions

So, in order to stay current with design trends, you must read Better Homes and Gardens magazine as a gardener. An instant tax deduction may be available if you pay for a subscription in full before June 30 and use it to generate assessable income for a book, periodical, or digital information.

Charity Donations

There is no better time than the present to make a donation to your prefered registered charity. Tax deductions for the 2017–18 fiscal year are available for contributions of more than $2 made by next Saturday night. Ensure that the donation is deducted from your bank account within the following week. Additionally, make sure the charity is kosher.

Clear Out Rubbish

If you've sold other investments at a loss this fiscal year, it's worth checking to see if you've made any losses. Your share fund's capital gains from 2017–18 could be offset by the worthless shares you purchased ten years ago for three times what they are currently worth. However, you must sell the junk by next Friday in order to use it as an offset against your possible capital gains tax liability.

Income Protection

Income protection insurance premiums are typically tax deductible, unlike those for other types of life insurance. In general, premiums paid in advance over the next six days are deductible from income for 2017–18.

Work Uniforms

Occupation-specific attire, protection gear, and clearly labelled work uniforms are all tax deductible expenses. For tax purposes in 2017–18, clothing improvements and updates purchased before next Friday are normally deductible, as are the costs associated with washing these garments. The tax office has very rigors guidelines on what constitutes uniforms.

Hail, Comrade

In general, union and professional organisation dues are entirely deductible from income in the fiscal year of payment. You will receive the benefits of the deduction sooner rather than later if you pay your annual dues in advance.

Home Work Help

But it can provide you with some worthwhile tax deductions. You require a USB device or hard drive to transport items to and from work. Before June 30th, upgrade to potentially receive a deduction. Like most expenditures, only the portion of tech equipment and home internet expenses that are incurred for work is eligible for reimbursement.

Office Hours

We frequently forget that the computer, desk, and office supplies we have at home are far too frequently utilised for business rather than for leisure. Depending on how much of your work is done from home, you could be eligible to deduct expenses for equipment, phone calls, heating, cooling, lighting, and cleaning. Equipment up to $300 may be deducted right away.

Vehicle Expenses

This week, those who utilise the log-book technique to deduct and allocate car expenses can get a jump start by scheduling maintenance and repairs earlier. A $1000 service completed on Friday can be deducted from taxes in 2017–18, but a service completed the following week must wait until the 2018–19 tax return.

Small Business

Prepaying up to 12 months' worth of deductible expenses, such as lease payments, insurance, rent, advertising, and maintenance contracts, will allow small businesses to receive a tax deduction for the current fiscal year.

Buyer Beware

Only if you can afford it makes sense to purchase anything a few weeks earlier than anticipated in order to earn a tax deduction. The king of business is cash flow. RSM manager Kym Carmody said, "If you're going to buy it anyhow and you move it from July to June, that's excellent."

Prepay Interest

If you have the investment-related income to offset it against, prepaying interest on investment loans can push the deduction into the current fiscal year. The maximum prepayment period for interest is typically 12 months. For those who own rental homes, this method for tax preparation is common.

Rental Fix

Spending at the end of the fiscal year can help landlords who are facing large tax obligations. For what the tax office refers to as repairs and maintenance, which includes things like replacing storm-damaged windows or painting the joint, you can instantly claim deductions. Don't overextend yourself because expenses not related to wear and tear are difficult to instantly claim.

Property Tidy

Gardening, pest control, insurance, council rates, body corporate taxes and charges, cleaning costs, and agency costs are less complicated tax deductions. However, according to accounting software company MYOB, owners of rental houses frequently forget to declare these regions.

Know The Step

Working Australians should never forget that our country has a progressive tax structure, notwithstanding Pauline Hanson's apparent ignorance of the concept. Your first $18,200 in income is tax-free. Only $1000 of your $88,000 a year income will be subject to taxation at a rate of 37 cents per dollar plus a 2% Medicare levy. The tax rate for income between $37,001 and $87,000 is 32.5 cents in addition to the Medicare levy.

Big Winners

The scheme is progressive, so the more you make, the more valuable a deduction is. A person making $90,000 will save $390 in taxes and Medicare levy thanks to deductions of $1,000, making the item's true cost of $610 instead of $610. However, the same deductions will only reduce tax on someone making $40,000 otherwise by $345. A someone making just about $37,000 will be $790 in the hole after saving around $210 in taxes. Anyone who earns less than the amount exempt from taxes will incur a $1000 loss.

Keep your documents in check.

Prepare all of your bank statements, loan documentation, and summaries of your rental income and expenses. This eliminates the need to acquire everything quickly and ensures that everything is prepared for lodging.

Ideally, your property management service will make this process simple for you.

Order and pay for a tax depreciation report

A quantity surveyor can create a depreciation schedule to enable you to claim the most depreciation. You are also entitled to the surveyor's fee.

You can also get assistance setting up this from your property manager.

Inspect your existing property before year-end and claim the travel expenses

Keep in mind that you can deduct any travel expenses you incur to inspect your commercial investment property (this is not for residential properties, unfortunately).

Take note of any repairs.

After one year of property ownership, a specific percentage of repair and upkeep costs may be written off. Consult your Property team to make sure that all of these are recorded.

Be mindful of your interest expenses.

The only mortgage-related expenses that qualify for a tax deduction are interest ones.

You must specify which interest payments are for which if your account was used for both personal and investment purposes.

Prepay non-capital expenses

If you're close to moving into a higher tax bracket, prepaying bills like insurance and interest payments can give you an instant tax break.

Manage capital gains effectively.

Be mindful of the date on the sale contract if you're considering selling your house. The capital gains tax event's timing is determined by the contract date, not the settlement date. The taxation of your capital gains may be postponed for an additional year.

Manage capital losses properly.

If your capital gains can't cover them in the same year, you can carry over capital losses from any year to unlimited intervals.

Which advice are you planning to put into practice? You'll see that the majority of these suggestions call for having an excellent property management team by your side.

Points To Remember

• Summaries of payments (currently known as income statements): This list your income from your company, superfund, or government benefits like Centrelink or Department of Veterans Affairs payments.
• Bank records: Details on the costs you have incurred and the interest, if any, that you may have been awarded over the course of the time period. Shareholder statements, statements for unit trusts and managed fund statements Details concerning any dividends or distributions that have been paid to you (you must disclose as income any dividends you want to reinvest).
• Investment buy-and-sell statements: It was required to compute both earnings and losses from capital investments. You can find out if you bought or sold any shares by checking your online brokering account, or you can ask your investment advisor or stockbroker for the information.
• Your rental property's records: You'll most likely receive an annual tax statement that lists your revenue and costs if you work with a property manager. If not, you must compile information on all earnings and expenses, including any capital gains or losses from the sale of the property.
• Foreign earnings: information about overseas pensions or other foreign earnings.
• The private health insurance policy statement must be provided in order for you to be able to finish the section of your tax return that deals with private health insurance (could be pre-filled this year).

Earnings that must be reported

Although it may appear that certain types of income are exempt from taxation, the ATO requires that you record all of the following common sources of income on your tax return anyhow. (This remains the case in spite of the fact that the COVID-19 situation has resulted in a lower quantity of money.)

• Employment earnings (including JobKeeper payments)
• Colossal annuities, pensions, and government payouts
• Profits from investments (including interest, dividends, rent and capital gains)
• Income from businesses, partnerships, and trusts
• Foreign earnings
• Funds raised through crowdsourcing campaigns (for example donations received for a venture in which you intend to make a profit)
• The sharing economy's revenue (for example Airtasker, Uber or Airbnb)
• Additional income, including but not limited to salary and insurance payments, employee share plans with reduced shares, certain prizes and awards, JobSeeker or other related welfare benefits.

Deductions

When you file your taxes, you are permitted to deduct some expenses; however, the majority of these charges have to be directly related to the generation of your revenue (referred to as "work-related expenses"). A deduction will, of course, reduce the amount of income that is subject to taxation, which will in turn result in a lower tax bill.

To deduct costs associated with your job:

• You must have used the funds yourself and weren't paid back.
• It must directly contribute to generating your taxable revenue.
• To support your argument, you ought to have documentation.

Here is a list of the possible deductions you may be eligible for if your expenses fall within certain conditions.

• Vehicle and travel expenses are not often included; however, if you use your vehicle for business purposes or if your job requires you to travel to multiple locations, you may be eligible to claim a deduction for these costs.
• Expenses related to apparel, including those for dry cleaning and laundering For the purpose of being able to deduct the cost of a uniform, it is necessary for the uniform to be unique and recognisable. This year, COVID-19 protective items such as face masks and gloves may be tax deductible, however this will only be the case if they are directly linked to the generation of income.
• Donations and gifts: Only submit claims for donations made to organisations that the ATO has approved as "deductible gift beneficiaries."
• A home office may incur expenses such as those related to the purchase of a computer, a phone, or any other technological device, in addition to recurring costs such as internet access. You may be able to deduct the cost of depreciation, but you can only deduct the portion of your expenses that are directly relevant to your profession and not for your own personal use. If you were required to work from home during the COVID-19 lockdown, you have the option of submitting your expenses for reimbursement utilising a different approach known as the "80 cents per hour" method (only from March 1).
• Deductions for interest, dividends, and other investment income: Examples include interest, account fees, subscriptions to investing publications, internet access, and computer depreciation.
• Self-education costs: If your studies are related to your current employment, you may be entitled to deduct costs such as tuition, student union dues, books, stationery, internet access, and home offices.
• Expenses, scholarly publications, and some travel.
• You should check with your tax preparer to see if you are qualified to deduct some or all of the price of any items or equipment that you purchase with the intention of increasing your income. This is applicable to both purchases made for personal use and those made for commercial use. The type of deduction that a taxpayer is eligible to claim will be established based on the amount of money that was spent on the asset. You are eligible for an instant deduction for the price of any individual items or sets that, when added together, total less than $300 and do not arrive as part of a set. This deduction applies to any products or sets that do not come as part of a set. You are permitted to deduct the value that has been lost in products that cost more than $300 each or that are part of a set that costs more than $300 in its entirety. This applies to both products that may be purchased separately and products that are included in sets that cost more than $300.
• In addition, you are eligible to deduct costs associated with earning a living, such as union dues, the cost of having your tax affairs handled, the cost of income protection insurance (but not if your super fund provides it), meals consumed during overtime, super personal contributions (that is, contributions made after taxes have been withheld), and other expenses.

Away From The Deduction Menu

The ATO is primarily concerned with assisting taxpayers in correctly claiming their deductions, but it is also on the watch for warning signs that people are acting improperly. Here is a list of tax deductions that you ordinarily cannot claim.

• Travel between one's home and place of employment is typically seen as private travel.
• Unless your business requires you to move large tools or equipment in order to perform your job, you won't need to worry about car expenses (and there is no secure area to store the equipment at work).
• Costs for a car for which a wage has been given up.
• Unless you were required to work away from home overnight, meal expenses are not covered by the government.
• Personal travel encompasses any aspect of a business trip that is undertaken for one's own purposes.
• Even if your employer requires you to dress a certain way, you should feel comfortable wearing the clothes you bought specifically for work (such a suit or a pair of black slacks, for example).
• Self-education costs that are not directly related to your current job.
• Expenses for personal usage of the phone or internet.

For real estate investors, it's critical to be able to evaluate your financial situation and the performance of your properties so you can make informed decisions, particularly with regard to taxes.

As a sole proprietor or independent contractor, your tax return will ultimately be rather specific to your position and circumstances.