You don’t need to be a wolf on Wall Street to maximise your tax return. By knowing what you can claim, understanding thresholds and filing your receipts and pay slips along the way, you can have a very happy EOFY.
There are a few things synonymous with tax time: mid-year sales, EOFY ads on the telly, and of course tax returns. And like all of us, you’ll want to get as much back as possible. Here’s how:
1. Claim work-related expenses
Depending on the industry you work in, you could claim tools, laptops, courses, books and even museums– anything you need that helps you do your job.
2. Claim work clothing
Unfortunately, this doesn’t apply to everyone – you can’t claim a year’s worth of ASOS. But if you’re required to wear specific work clothing or a uniform (think black and white checked pants for chefs), you can claim it as an expense.
You could also claim dry-cleaning, and the costs of washing, drying and ironing too.
3. Claim travel expenses
If you use your car for work purposes, this one’s for you. Petrol, insurance, registration and even road tolls can be claimed as an expense. In fact, you don’t need to own a car to take advantage of this deduction – Ubers, taxis and public transport can also be claimed.
But before you think you’ve hit the jackpot, travel expenses must be incurred in the course of performing your job. Your journey to and from work, and any personal travel during the day can’t be claimed.
4. Claim your home office
If you’re like Carrie from Sex and the City and have the pleasure of working from home, there’s a lot you can claim. Tax and the city!
The most common expenses you may be able to claim includes the work-related portion of your phone and internet bills, heating, cooling and lighting of the workspace, and home office equipment and furniture. It’s also an option to claim the depreciation (the decline in value) of these assets.
5. Give back to charity
Whether you gave a once-off donation or you’re a regular giver (go, you!), your charitable donations can be tax deductible. You’ll just need to ensure your gift is over $2, there’s proof of your donation (receipt or bank statement) and the charity has a DGR (Deductible Gift Recipient) status.
So, now there’s no excuse not to give back.
6. Make super contributions
Superannuation is an easy and tax-effective way to save for your retirement. But you may not realise you can reduce your annual taxable income by making extra super contributions. You can do this in two ways depending on your annual salary:
i) Concessional contributions
Also known as before-tax contributions, these are funds that go into your super account from your pre-tax income. You can contribute a maximum amount of $25,000.
ii) Non-concessional super contributions
These are payments you manually put into your super account from your savings or taxed income.
7. Take advantage of the tax-free threshold.
Not every dollar you earn is taxed. In fact, the first $18,200 of your yearly income isn't taxed – this is called the tax-free threshold. The tax-free threshold helps reduce the total amount of tax you pay during the year.
It’s up to you to answer ‘yes’ to question 8 on your tax declaration form: Do you want to claim the tax-free threshold from this payer? If you don’t answer ‘yes’ and you’re overtaxed, the ATO will refund you at the end of the tax year.
8. Claim any losses on your investment.
One of the big perks of investing in property is that you can claim the interest charged on the home loan – or a portion of the interest – as a deduction.
But it doesn’t stop there. From real estate management fees to council and water rates, you can claim a whole range of costs. See the full list here.
Still not sure what to claim?
Understanding deductions and available tax benefits will help you get a healthy tax return, but it’s important you keep all your receipts, bank statements and any paperwork that financially relates to your job – especially if you’re randomly audited by the ATO. And above all else, consult a tax accountant if you’re not sure – because guess what? Their fee is tax deductible too.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.