How to face the tax season
For many the thought of completing your tax return can make you break into a cold sweat . With ever-changing rules and regulations, it can be overwhelming, so how do you receive the best possible tax result?
Know what you can claim – To claim a deduction you must have spent the money, it must relate to your job, and you must have a record to prove it. Different occupations have different rules for what you can claim, so get advice.
Keep the proof – You must keep good records and receipts of every item you are claiming deductions on.
Don’t forget donations – Donations can be tax deductable if they are over $2 and have been made to an eligible charity or deductable gift recipient.
Claims for protection – If you pay income protection insurance, you can claim a tax deduction on the premiums (unless you pay it within your superannuation fund). It’s such an important thing for every person who earns an income to have, so please ensure you have the right income protection in place.
Car expenses – This can be worthwhile to claim if you keep good records. Even if you run down to the bank daily for your employer it quickly mounts up. For example 10km per day could work out to about 2,400 km per year. If we use a rate of $0.77 cents per km, then a deduction of $1,848 could be claimed. Using a tax rate of 34% (including Medicare levy) as an example, this could reduce your tax payable by approximately $628. Be careful though, you MUST genuinely be using the car for work purposes and you must keep proof of the distance travelled.
Self education – If you are paying for training, you may be able to claim a deduction. It has to be connected to your job –e.g. You cannot claim self education for a flower arranging course if you are a mechanic.
Don’t try and do it on your own – The process can be made easier by entrusting your tax return to a professional accountant, ensuring you receive advice specific to your situation. Remember your accountants fee is also tax deductible!
Happy tax season!
The post How to face the tax season appeared first on BMO Accountants.
