When you submit your tax return every year, do you receive the entire tax refund you’re due? Are you seeking more tax relief, but aren’t sure where to begin and don’t want to be in trouble with ATO?
In Australia, millions of taxpayers do not take advantage of legitimate tax deductions. This means that people don’t receive the tax refunds they are entitled to. Are you one of them?
The tax system of Australia is complex and has many rules regarding what you can and cannot claim. Tax deductions aren’t straightforward but there are options to seek help and make sure you get it done right
- Prepay Your Bills
It’s easier to pay your bills weekly than monthly. However, it’s much more convenient to pay some bills in one lump sum. The tax deduction you can claim this year for expenses that are wholly or partially related to next year will help you not only get these expenses back but also allow you to receive a higher refund.
- Ask your tax agent questions
Are you aware of each deduction and expense related to work you’re legally allowed to deduct on your taxes?
For the majority of us, we know the answer will be “no”. The reason is that the majority of Australians use an accountant more than 70% of them use an agent such as ismaccountants.com.au as per ATO statistics.
You can ask your tax advisor regarding tax-deductible expenses and the types of deductions you can claim as they often recommend an additional deduction that you did not have.
For instance, did you not know that unless covered by your superannuation, you can claim the Income protection premiums?
It is also possible to be able to claim expenses related to work expenses for home offices, mobile phone expenses, car expenses as well as union fees. Just one additional deduction could yield many dollars when it comes to tax time which will help you receive a larger tax refund. Make sure you ask your tax professional!
- Save your receipts.
If you purchase something for work, no matter how small or large the purchase can make is important to keep your receipts so that you can deduct the cost in your return to the IRS. (In fact, it’s not just is it crucial, but that’s also the law!)
The ability to save receipts allows you to get more reimbursements for your expenses. This is why it’s a fantastic method to increase your income tax deduction.
- Claim mobile phone costs related to work
If you make use of your mobile phone for business calls, you are also able to get a percentage of your annual cell phone usage on the tax returns.
To figure out the amount that the phone bills that you can claim, you’ll require an account statement for each month from a “typical” month and a calculator. Determine the percentage of work-related calls that you made and then you can claim the percentage from your annual bill.
For step-by-step instructions on how to claim expenses for mobile phones, read this article about calculating your mobile tax deduction.
Making sure you claim your mobile phone costs could give your tax return an extra boost. If 40 percent of all your phone calls are related to work and you are spending 660 dollars each year on your telephone bill then you can claim $234 in work-related mobile phone charges when you file your taxes. If you earn $60,000, that can mean more than $70 on your tax refund
- Invest in tax planning
Tax planning is one way to get maximum tax refunds. Planning for tax starts at the beginning of each year. It considers how much you will earn, and what other expenses or income may affect your total tax liability. Planning helps you to evaluate the best ways to use your money to purchase tax-deductible, but still necessary items, or make other tax-reducing investments. Tax-planning professionals can use computer software to analyze the numbers and determine what adjustments you can make to reduce the tax bill and increase the refund.
