Tax Deductions You Might Be Missing
Note :The information in the articles below is of a general nature only and may not be relevant to your specific individual circumstances. You may need to engage ezytaxback.com Pty Ltd to provide you with specific advice to suit your specific circumstances.
With Tax Season in full swing it is important to remember the little things that might have a huge effect on the result of your Tax Return. To help you get into gear here are some simple tips on how to reduce tax mistakes and how to get a higher tax return:
Have a deduction strategy
The best way to increase the value of your tax return is through deductions. It may seem like an obvious solution, yet more than 45 per cent of young Australians age between 25 and 34 failed to claim further than the $300 threshold for their tax returns the previous year.
To ensure dollars end up back in your pocket and to reduce the possibility of making tax deduction mistakes, it’s worth spending some time getting to know the items you can and cannot claim for your particular industry or occupation and subsequently creating a tax deduction strategy. For instance, flight attendants are able to claim rehydrating moisturisers and hair conditioner in order to meet strict grooming requirements. Similarly, police officers required to maintain a high level of fitness for their position can claim gym membership and the cost of traveling directly from the workplace to the location of exercise.
Currently individuals can claim $300 without receipts, however, once this value is exceeded you must be able to produce receipts for all expenses. So take advantage of tax-time and keep a tight lid on your shoebox of receipts to ensure an efficient tax deduction strategy and to maximise your refund.
Avoid simple tax mistakes
The tax system is complex in nature and making a mistake can be detrimental to your hip pocket. The most common mistake is overlooking the amount earnt from your financial institution account. This is called interest income and it must be declared when lodging your tax.
The ATO is currently focused on taxpayers claiming depreciation on rental properties. It is vital for individuals to understand the difference between repairs and additions to rental properties. What underlines a repair is the intent to restore the property to a condition it was previously in, without changing its character. Repairs are considered an expense and can be claimed against rental income, whereas additions take the form of capital. However, repairs that take place shortly after the property is acquired are considered to be costs associated with acquiring the property and are therefore a capital expense and not deduction.
Keep your employer informed
If you have a HECS/HELP debt and earn more than $55,874 from July 01, 2017, it is compulsory to repay the loan even if you are still studying. Your employer can withhold additional amounts from your wage to cover the required repayments. Otherwise, you will need to pay back money as part of your tax return.
You can also apply to have less tax taken from your wage if you have an investment property with a mortgage. Instead of collecting negative gearing benefits at tax time you’ll be able to enjoy a little extra throughout the year.
Instant $20,000 write-off
For small businesses cash flow is a priority. Last year small businesses were able to purchase assets up to the value of $20,000 and receive an immediate deduction for the full value rather than having to write it down over the following years.
From July 1 this year, the federal government is extending this tax deduction strategy to businesses turning over up to $10 million. Get in quick to claim your tax savings because the policy is limited until June 30, 2018.
Use a registered tax agent
It’s important to keep-up-date with your tax. Filing an individual claim with a registered tax agent or accountant like Ezytaxback.com, will help prevent tax mistakes. You’ll also get expert advice and avoid potential penalties in the event of an audit. The team of qualified accountants will also review your return and can provide you with a tax deduction strategy to show you how to get a high tax return and ensure there are no tax deductions you are missing out on before it reaches the ATO.