How to Get More from Your Tax Return
It’s tax time and the good news is that this year many Australians can expect to see a larger return, due to tax cuts that were introduced last year now coming into play. Here’s how to get organised and make sure that you maximise your return.
Have your paperwork in order
The best way to make tax time less stressful is to have a streamlined method for managing receipts, invoices and expenses throughout the year, and there are a lot of tools available these days that can help. The ATO has a smartphone app now that lets you record expenses, work-related car trips, sole trader income and photos of your receipts. Then, when you're ready to lodge your return, the software can pre-fill your tax return with that info. If you're using an agent, the software can even email it all to them.
Claiming work from home expenses
With more Australians working from home now than ever before, this issue is again top of mind for many. Figuring out how and what to claim can be confusing. Thankfully, the ATO has extended the “shortcut method” that it introduced last year through to 30 June 2021. This method simplifies matters by allowing you to just claim 80-cents per hour for each hour you worked – you’ll need to have kept a log of your work hours, ideally. This covers costs including electricity, gas, phone and internet. However, if you made significant investments in home office furniture or work-related technology that were not reimbursed by your employer, you’ll need to use the somewhat more complex ‘actual cost’ method to claim depreciation for these items. Find out more about claiming home office expenses.
Claiming charitable donations
If you supported any local or global charities during this past year then make sure that you claim these as tax deductions. Note that donations can only be claimed if they were made to registered charities. So, if you made a donation to a Go Fund Me page, for example, it will likely not be tax deductible. As always, you will need to have evidence of any donations you made to claim them.
Claiming super contributions
One tax effective strategy that helps you both now and in the future is making voluntary contributions into your superannuation, as these are only taxed at the rate of 15 per cent. Find out more about claiming deductions for personal super contributions. Speak with your Financial Advisor about comparing your superannuation fund and opportunities to grow your superannuation tax effectively. This could be particularly important for your long-term financial future if you were one of the many Australians who needed to withdraw some of their super early for emergency funds during the pandemic.
Some good news for your super
The Super Guarantee (SG) rate is set to increase from 9.5% to 10% on 1 July 2021. It will then progressively increase by 0.5% per year until it reaches 12% in July 2025. Both concessional and non-concessional superannuation contribution caps will also increase from 1 July 2021.
Callus anytime on (02) 8268 2900 for an obligation-free chat about your financial plans and goals.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.