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It’s almost June 30, meaning that you will need to start giving some thought to your tax return. Below are a few handy hints that will not only prepare you as best as possible for this; in some cases, you may even be able to increase your tax refund. However, this will require some preparation on your part.
1. Start Planning in Advance
Firstly, you will need to decide how and when you are going to submit your tax return. Will you ask an accountant for assistance or attempt to do this yourself? Although your choice will obviously depend on how complex your financial situation is, you will need to allocate a little time to doing so in advance.
2. Gather Everything you will Need
In many cases, the most challenging part of submitting your tax return will be locating all of the necessary paperwork. As a result, it is strongly recommended that you keep all tax-related paperwork in one place during the year, including credit card statements, purchase receipts and any other information you think will be needed.
Other information you should have on hand should include records of interest, payment summaries, details of any foreign pensions, school fees, your spouse’s income information and any other paperwork pertaining to rental properties or investments (if applicable). A full list of the required information prepared by Roy A. McDonald can be found here.
3. Be Aware of your Permitted Deductions
Many people are not aware of what they will be allowed to claim with regards to legitimate tax deductions. Knowing what you will be allowed to claim with regards to deductions could help increase your tax refund extensively. Some commonly permitted tax-deductible expenses can include dry-cleaning for work uniforms, work-related courses or training, office expenses and anything else that is used mainly for work purposes. If you are unsure of what you will be allowed to list as deductible expenses, then contact us to assist.
If you would like to increase your deductible expenses, you could consider purchasing appropriate items before June 30 this year. This will enable them to be deductible against this year’s income.
4. Organise all of your Invoices and Paperwork
This is the right time to issue any final invoices and ensure that you do not have any that are going to be overdue for payment by June 30.
5. Boost your Superannuation and that of your Spouse
If you are willing to sacrifice a little of your pre-tax income during the financial year, you will be able to increase your super savings while also reducing your actual taxable income.
Salary sacrifice contributions are currently taxed at a maximum rate of 15%, which could be less than your marginal rate. In addition, contributing to your spouse’s super will help boost their super savings. This may also entitle you to a tax offset if your spouse is earning under $37,000 per year.
6. Prepare for the Upcoming Year
Financial year-end is also the ideal time to learn how to understand your finances. Once you have submitted your tax return, you should be sufficiently equipped to prepare for the upcoming financial year. Start looking for ways to improve your budget or overall financial situation – you may find that with a little restructuring, there will be funds available to invest in property or shares.
Keeping the above mentioned tips in mind, setting up an appointment with an accountant or financial advisor and performing a little additional research will enable you to be ready to face the new financial year with confidence.