It’s that time of year when we all look at what last-minute things we can do to maximise tax savings. In this article, we highlight some simple things you can do to reduce your personal tax.
Claim the cost of working from home – If you work from home some days, keep a diary of the hours you have worked at home to claim the 67 cents per hour shortcut rate. Other methods apply for home-based businesses and where your expenses are higher and claimed separately.
Costs connected to your job – If you spent money related to your work that was not reimbursed by your employer – e.g., meals while you were away overnight, etc. – you can generally claim these (make sure you have receipts). Check the ATO’s industry-specific guides on what’s reasonable to claim.
Donations reduce your tax – If you are likely to have a big tax bill this year from gains you have made, consider a larger-than-usual donation to a deductible gift recipient (DGR) charity before 30 June.
Top up your super – You can claim a deduction for contributions you personally make to super from after-tax income up to $27,500 per annum (assuming you have not reached your transfer balance cap). You need to lodge a notice of intent to claim with your super fund. See below for super strategies.
Studying for work – Self-education expenses that are related to the work you do are often tax deductible, although there are some parameters around this. So, if you have been taking short courses to improve your knowledge, you can often claim the cost of the course and some other related expenses. Just be aware that study costs to obtain new work or to start a new business are not covered. The study needs to be related to how you earn your income now.
Building and managing your investments – The costs of earning interest, share dividends and income from your investments is generally deductible. This includes the account fees for investment accounts, interest on loans for investments you earn income from, the cost of investment seminars if they are directly related to investments you have made (not intending to make), fees for investment advice relating to existing investments, ongoing investment management fees, and specialist journals and subscriptions related to your investments. But, brokerage fees, an initial investment plan, transaction fees, etc are not generally deductible.
Pay in advance – While paying in advance for deductible expenses doesn’t save you cash, if you need to reduce your tax bill, you can pay some deductible expenses for next year by 30 June and take the tax deduction this year.
Studying for work – Self education expenses that are related to the work you do are often tax deductible, although there are some parameters around this. So, if you have been taking short courses to improve your knowledge, you can often claim the cost of the course and some other related expenses. Just be aware that study costs to obtain new work or to start a new business are not covered. The study needs to be related to how you earn your income now.
Building and managing your investments – The costs of earning interest, share dividends and income from your investments is generally deductible. This includes the account fees for investment accounts, interest on loans for investments you earn income from, the cost of investment seminars if they are directly related to investments you have made (not intending to make), fees for investment advice relating to existing investments, ongoing investment management fees, and specialist journals and subscriptions related to your investments. But, brokerage fees, an initial investment plan, transaction fees, etc are not generally deductible.
In conclusion, every individual’s financial circumstances are unique, and the guidance of a knowledgeable accountant can greatly assist to maximise your tax savings. At Collective Financial Partners, our dedicated accounting team is here to help. We offer personalised advice and solutions that are tailored to your specific needs, ensuring that you make the most of available opportunities. Take control of your financial future by reaching out to us today at 02 4050 0900.
General Advice Disclaimer:
This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.
