5 tips for how to get tax time sorted
While we no longer face the daunting task of filling out paper forms at tax time, doing your taxes might still be a task you tend to avoid.
But putting our head in the sand isn’t doing us any favours, and can actually stop you from getting the best return possible. The good news is that you don’t have to go it alone or be left wondering what you need to do and when.
Ready to tackle tax time, minus the hassle and headaches? Here are our tips to help make tax time a little less daunting and ensure that what you’re entitled to stays firmly in your pocket.
1) Set a date.
With June 30 rolling around quickly, tax time can come and go in the blink of an eye. Before you know it a year has passed before you’ve made time to do your tax return for the previous financial year.
Whether you plan on doing your tax yourself or using an accountant, put a time in the calendar now or call your accountant to book an appointment. Now is also the time to ask your accountant how they would like your information to be organised and provided, this will save them time and you money.
2) If you have private health insurance, hunt down the most recent annual statement (if you aren’t working with a tax agent)
Times are changing, which means you might have fewer documents to gather ahead of tax time this year if you’ve taken out private health insurance.
If you’re working with an accountant or tax agent to lodge your tax return or you’re using myTax, your health insurance details should be pre-filled for you.
However, if these details aren’t pre-filled or you’re lodging a paper tax return, you’ll need to get in touch with your insurer to secure a private health insurance statement. This form is needed to help you complete the Medicare levy surcharge section of your tax return.
3) Claim on work-related expenses.
It’s important to know what deductions are available to you. Start by downloading the ATO’s myDeductions app to track your deductions.
In the words of the ATO, any work-related expenses that you plan to claim as tax deductions need to:
- Be purchased with your own money (and not reimbursed by your employer)
- Be directly related to helping you earn an income
- Have records to prove them (usually a tax invoice or receipt)
Your claims for deductions need to be reasonable. If you use your phone for work, by all means, claim it as a work-related expense. But, if you only use it 50% of the time for work, then only claim it at 50%. Simple!
There have been recent short-cuts to claiming work expenses brought in by the ATO. These changes are in light of COVID-19 and the increase in the number of Australians working from home. The good news? This temporary shortcut method has been extended until June 30 2022, so head to the ATO’s site to find out how to make a claim on your WFH expenses.
4) Consider making a donation.
Making a tax-deductible donation to your favourite charity (or finding the receipts from donations you’ve made throughout the financial year) can be a great way to give back and reduce your tax.
Make sure to check that the charity you’ve donated to is registered on the ACNC Charity Register (as these are the only charities that you can claim tax deduction donations from).
5) Consider contributing to your super or making a spousal contribution before the End of Financial Year.
Making a personal super contribution can be another great way to reduce your bill at tax time and invest for your (or your spouse’s) long term future. Read more about personal contributions, the different types and how to go about making the payment. You can also login to your Verve Member Portal here if you’re ready to make a payment!
Bonus tip for self-employed folk: what you need to know about super contributions and tax time
We get it: you’re juggling a thousand priorities when you’re running your own business. But ignoring your super isn’t going to serve you well now or in the decades to come.
While super contributions aren’t compulsory if you’re a sole trader, they can offer big tax benefits. That’s because your super contributions can be claimed as a tax deduction and are taxed at just 15% (which is usually much lower than your income tax rate).
All you need to do is make a personal contribution to your super fund and lodge a valid Notice of Intent to Claim form with your super fund.
It’s important to check the contribution caps that apply to make sure you don’t exceed your claimable amount. We’ve pulled together a handy guide to what you need to know about making self-employed super contributions (complete with a step-by-step guide to how to do it as a Verve member).
And that’s a wrap. When it comes to preparing for tax time, the earlier you get started the more confident and in-control you’ll feel throughout the process.
Looking for a practical and straightforward guide to help you make informed and proactive decisions when lodging your tax return? Show tax time who’s boss and download Verve’s full ultimate tax time guide.
This blog is published by Verve Superannuation Pty Ltd (ABN 65 628 675 169, AFS Representative No. 001268903), which is a Corporate Authorised Representative of True Oak Investments Ltd (ABN 81 002 558 956, AFSL 238184), as the Sub-Promoter of Verve Super.
Verve Superannuation Pty Ltd and True Oak Investments Ltd are not licensed to provide personal financial advice. The information contained in this blog, including any financial guidance, is general in nature. You should consider seeking independent legal, financial, taxation or other advice to ensure that your financial decisions are suited to your unique circumstances.
You should read the Product Disclosure Statement, Additional Information Booklet, Insurance Guide, Target Market Determination and Financial Services Guide before making a decision to acquire, hold or continue to hold an interest in Verve Super. When considering financial returns, past performance is not indicative of future performance.