When it comes to getting the most from your tax return, there is plenty to consider. So we’ve compiled a checklist of options that could allow you to save big this tax year.
If you’re considering a tax deduction for making super contributions, here are a few things to bear in mind.
- This year June 30th is on a Sunday and all contributions must be received before June 30. Some banks might not include Sundays in their normal processing time, and this could lead to your contribution arriving later than the 30th and not being deductible until the following tax year.
- When making personal contributions, you have the advantage of only being taxed at 15% up until $25,000 of total contributions for the year; rather than being taxed at your personal tax rate.
- You can put up to $300,000 for one year but you can’t claim the tax deduction for those contribution.
Superannuation is always a changing system, so making the time to speak to a professional is always wise.
Self Employed/ Small Business Owners
For those who are self-employed there a number of ways to reduce your tax.
- You can make up to a $30,000 write-off on each purpose and multiple purchases can be made. The scheme was a $20,000 write-off but has been increased now to $30,000
- Small-Business Owners can deduct the cost of food and drink when travelling for work and overnight stays. So long as they keep the receipts and invoices (How the scheme works).
- You can also claim the costs of having eligible work clothes dry-cleaned. Once again don’t forget to keep those pesky receipts and diary entries if: the amount of your claim is greater than $150 and/or the amount your total claim for work-related expenses exceeds $300 – not including car, meal allowance, award transport payments allowance and travel allowance expenses.
- If you own a business that operates outdoors, maybe in gardening or building, you can get a nice tax deduction for the cost of sunscreen, hats and even sunglasses. This type of deduction is possible after a court ruling in a challenge by outdoor workers to the ATO.
- However, be careful claiming clothing as a tax reduction. You can claim a deduction for occupation-specific clothing. This means it is specific to your occupation, is not everyday in nature and allows the public to easily recognise your occupation. An example is the checked pants a chef wears. Don’ try and claim the cost of clothes that are not specific to your occupation. Trousers, shirts, or a suit, even if compulsory work attire are unfortunately not tax deductible.
With June 30 quickly approaching it could be a matter of shopping until your tax drops!
If you have capital gains that might be taxed. Look at your capital losses to reduce your tax. Capital losses occur when you sell an investment for less than your investment in it and can be used to offset any capital gains.
If you’re selling an investment property or holiday home (as many people are being forced to with land tax increases) , the capital gains is based on the sale price minus your expenses (not just the initial cost of purchase!). Below are a list of what expenses are included.
- Incidental costs– stamp duty, legal fees, agent fees and advertising and marketing fees.
- Ownership costs– rates, land tax, maintenance and interest on your home loan. Note that you can only add rates, land tax, insurance and interest on borrowed money to your cost base if you acquired the property after 20 August 1991, or didn’t use the property to produce an assessable income e.g vacant land or main residences.
- Improvement costs– replacing kitchens, bathrooms or any other improvements you’ve made on the property
- Title costs– legal fees associated with organising and defending your title on the property
Remember: The ATO are now data matching so do not think you can sell a property without the ATO knowing about it.
Check out our full interview with Accountant and CEO Dr. Steven Enticott of CIA Tax on how to prepare for June 30. Full video:https://youtu.be/w33MNjagZr8
For a limited time, we are giving you a free consultation with our friendly and knowledgeable consultants, simply enter your details below. Hurry before spots in June fill up!
The information in this website and the links provided are for general information only and should not be taken as constituting professional advice.