Key End-of-Financial-Year Tax Tips!

As the end of the financial year approaches, it’s time to consider how you can maximise your tax return. Strategic planning and informed decisions can ensure you get the most out of your tax situation.

Claiming Deductions

Boost your tax return by claiming all eligible deductions, including work-related expenses, charitable donations (preferably by the highest income earner in the household), and costs associated with managing your investments. To claim a deduction, you must have spent the money yourself, it must be directly related to earning your income, and you must have a record to prove it.

Home Office Expenses

With more people working from home, it’s important to understand what home office expenses you can claim. These may include a portion of your internet and phone bills, office supplies, and equipment depreciation. Maintain detailed records to substantiate your claims. The required documentation varies based on whether you use the actual cost method or the fixed rate method, which simplifies record-keeping.

Investment Property Depreciation

If you own an investment property, obtain a Property Tax Depreciation Report to claim maximum depreciation and building write-off deductions, potentially reducing your taxable income.

Deferral or Advancement of Bonus Income

Consider the timing of your bonus income. If you expect a lower income next financial year, ask your employer to defer bonuses until after June 30. Conversely, if you anticipate higher income next year, bring forward bonus payments to this financial year to balance your taxable income.

Lodge Your Return Early

If you expect a refund, lodge your tax return early to avoid penalties and use your refund effectively, such as by investing it or depositing it into your home loan offset account.

Superannuation Contributions

Voluntary concessional superannuation contributions can reduce your taxable income and build your retirement savings. Ensure you stay within contribution caps to avoid extra tax.

Seek Professional Advice

Tax laws are complex, and the best strategies for maximising your tax return depend on your circumstances. Seek advice from a tax professional for tailored guidance. Contact us with any questions.

Conclusion

Proactive steps and strategic planning can help maximise your tax return, leading to significant savings and a better financial future.