No-one wants to pay more tax than they absolutely have to, yet all too often I see people unnecessarily paying more tax than they should have.
Here are 8 very simple tips to ensure you don’t pay any more tax than you need to – they’re quick, simple and totally legitimate:
1. Keep your receipts
If you’re paying cash for business or work related expenses make sure you keep your receipts. Lost receipts for expenses paid by cash are one of the most common lost tax deductions. Better still use a system such as Shoeboxed or the Australian Taxation Office’s myDeductions app and take pictures of all your receipts so you don’t miss out on any deduction.
2. Get a property report
If you have an investment property and it’s under 40 years old make sure you get a quantity surveyor’s report so you can claim depreciation on the building or renovations as well as fixtures such as the dishwasher, hot water system and even light fittings. A quantity surveyor report costs about $400 and the great news is that the report is also tax deductible.
3. Leverage your home office
If you work from home keep a diary and you can claim 45 cents for every hour you work at home. It might not seem like a lot but it soon adds up.
4. Two income households
In a two income family have the higher earner pay for any tax deductible donations and claim it on their tax return.
5. Use a car logbook
If you use your car for work make sure you keep a logbook. Keeping a logbook gives you more options, which means potentially more of a tax deduction, when it comes to claiming your motor vehicle tax deductions. Without a logbook you are restricted to claiming a maximum of 5,000 kms per year at 66 cents per km.
6. Salary sacrifice superannuation
Salary sacrifice superannuation from your wages. Not only will you reduce the tax you are paying but you are boosting your retirement nest egg.
7. Avoid the Medicare Levy Surcharge
A common and often very costly oversight is unnecessarily paying the Medicare Levy Surcharge. The MLS is a levy in addition to the 2% normal levy which you have to pay if you’re an individual and earn more than $90,000 or a family who earns more than $180,000 and you don’t have basic private hospital insurance. The MLS can be quite expensive as it’s another 1-1.5% on top of the normal 2% Medicare levy. My tip is get the insurance, get the tax benefit and get the hospital benefits – it’s a win/win.
8. Use a good Accountant
And finally get yourself a good accountant. A good accountant will ensure you are claiming absolutely everything you are entitled to and as an added bonus you can claim their fee and travel to and from their office as a tax deduction.
Originally published on Smallville on 3/6/2016