January this year felt wicked long, but all the other months that followed seem to have flown by rapidly. A few blinks, and here we are, just a few days away from the later half of 2018.
For our Aussie friends, the 30th of June isn’t just a time for those lengthy, somewhat reflective personal Facebook photo essays; it also signifies the end of the current tax year. Now, most of us look forward to paying our taxes in the same way that we look forward to getting a root canal procedure, but there are a few last-minute deductions you can apply to increase your tax refund at the end of this month. These include the following:
1. Living Expenses.
Here’s another fun benefit that comes with working from home: your living expenses also count as working expenses.
That’s right, whether you telecommute full-time or part-time, your home counts as your workspace, so your bills for heating, cooling, lighting, and water can all be claimed as tax deductions. The same goes for other costs like cleaning and the depreciation of your home office furniture and fittings, along with computer consumables like ink cartridges, stationary, and Internet charges.
Best of all, capital equipment (e.g., work computers and associated hardware/software) valued under AU$300 can be written off in full immediately.
2. Phone Bills.
Do you use your mobile phone to keep in touch with your boss or your clients? (Duh.) If so, you can log your work-related uses and file these along with your phone bills so that the corresponding percentage can be applied to the whole tax year.
3. Car Maintenance and Gas.
If you make a lot of trips due to work or business activities, you can claim the resulting maintenance and petrol expenses as tax deductions. All you need are the receipts, invoices, and records of such journeys to substantiate your claim.
4. Retirement Fund Contributions.
Got cash to spare? Why not make a sizable contribution to your super fund?
Provided that your total contributions (including those of your employer’s) don’t add up to more than AU$25,000, investing in your super fund before the 30th not only boosts your retirement savings, but also allows you to claim a sizable tax deduction as well. Just make sure you fill out this form and inform your super fund about the payment before you file for the corresponding tax return.
5. Charitable Donations.
Donations of AU$2 or more to your favorite registered charity (the key word here is “registered,” so no, your personal bank account doesn’t count, mate) can be claimed as tax deductions.
Considering how easy it is to donate to the numerous deserving charities out there, you might as well do some good while you’re beefing up your tax forms.
6. Prepaid Expenses.
We’re talking annual union fees or professional subscriptions. You can actually pay for these in advance if you want to reap the tax benefits before the end of the month. Considering that some seminars or online courses provide early-bird discounts, you may end up saving more money than expected, making this a win-win.
7. Capital Losses.
Selling off an underperforming asset in your portfolio can help you offset any capital gains you may have had in doing the same for a more profitable investment.
However, you may want to refrain from buying back the sluggish shares in the next tax year. Australian tax authorities happen to frown upon “wash sales,” which pertain to the sales of shares sitting at a loss and then their subsequent purchase immediately after the end of the tax year.
Best to wait a while before repurchasing the same asset, lest you get slapped with tax evasion charges, tax benefit cancellations, and accompanying penalties. Ouch.
8. Instant Asset Write-Off.
This applies to business owners who have recently made capital purchases like tools, trading equipment, motor vehicles, office equipment, tablets and smartphones.
For a ceiling amount of AU$20,000, you can claim an immediate tax deduction for asset depreciation rather than distributing the cost over several years. This is called the instant asset write-off, and all businesses with aggregated turnovers of less than AU$10 million are eligible for it.
Regardless of which tax deduction you choose to make use of, don’t forget to gather written evidence. Receipts, invoices, and bank or credit card statements can help substantiate everything you intend to claim, thus helping the process go a bit more smoothly.
Lastly, if you’ve got time, try to consult with accredited tax agents. They’ll be able to give you even more precise advice on how to maximize your tax returns further.