Disclosure Statement: Durand Financial Services Pty Ltd and its advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. General Advice Warning: The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances.
July 1st is fast approaching, and we all know what that means. Yes, it’s tax time. Unfortunately, filing taxes can be a laborious, frustrating, time-consuming, and somewhat overwhelming process for some of us. However, for others, filing their taxes is a necessary evil that gives them a fantastic opportunity to reduce their tax liability.
These people see the annual period between July 1st and October 31st as a great time to take back a little of what the government took from them. So, what are some simple tax tips you can employ this year?
Work From Home Expenses
COVID changed how we live, what we do, where we can go and how we stay in touch with friends, family members and relatives. However, it also changed how we work. Working from home soon became the norm for many of us during the pandemic.
Claiming work from home expenses requires that you meet three criteria. First, you must have a receipt for each expense you claim. Second, your costs must be tied to how you earned an income. Third, this must be money you spent yourself for which an employer did not reimburse you. So, what can you claim?
- Car Expenses
There are essentially two methods of claiming car expenses. The first uses the ‘cents per kilometre’ method, while the second involves the ‘logbook method’. Of the two, the first option is much more straightforward. You can claim 72 cents for every kilometre up to a maximum of 5000 km.
You can apply a portion of your car expenses to work-related tasks for the logbook method. You can claim your costs of fuel, oil changes, car registration, car insurance, and the decline in your vehicle’s value. However, you need to keep highly accurate records and retain all receipts.
- Travel Expenses
These expenses include lunches with clients, hotels and accommodations, and public transit expenses. Again, keep all receipts and ensure that all costs are your own and were not reimbursed.
- Dry Cleaning and Clothing Expenses
You can claim the costs of dry cleaning and clothing if these expenses are work-related. These expenses might include the costs of a new suit, shoes or pants and shirts.
- Self-Improvement, Training, and Learning Expenses
You can claim any expenses for studying, training, or learning a new trade or skill. This includes course and tuition costs, fuel, parking, computers and computer consumables, books, stationery, trade journals, and a portion of the fees and interest paid on a Higher Education Loan Program (HELP). If you become part of a union after completing your course training, you can deduct a portion of your union dues and fees.
You can claim any expenses you’ve covered and have not been reimbursed for COVID testing, PCR testing and other work-related medical expenses.
As of July 1st, the superannuation guarantee for all employees is increasing from 10% to 10.5%. While you can’t claim tax deductions for before-tax income contributions made by your employer, you could claim a tax deduction for any after-tax contributions you’ve made yourself to your retirement plan. These after-tax contributions would include you making payments directly from your account after receiving your paycheck.
You can claim expenses relating to the costs of managing tax affairs. This means claiming the costs of completing your tax return by an agent, getting advice from a tax preparer or lawyer, or any tax preparation software you purchase.
You can claim donations or gifts you’ve given to a deductible gift recipient (DGR) organisation. You can also claim some deductions for any expenses you’ve covered to earn interest on investments or a portion of your premiums paid on income insurance.
Have a Plan
Having a plan this time of year really pays off in the end. If you’ve been working from home, think about all the costs you cover to earn a living. Keep all receipts and be specific about the deductions you’re applying for. It might help make this year’s tax filing a much simpler process.
If you need help getting started on your investment journey or require expert financial advice, please get in touch with your Accountant and Financial Adviser. They’re there to help you secure your future no matter what stage of life you are in.
General Advice Warning:
The information in this App is provided for information purposes and is of a general nature only. It is not intended to be and does not constitute financial advice or any other advice. Further, the information is not based on your personal objectives, financial situation or needs. You are encouraged to consult a financial planner before making any decision as to how appropriate this information is to your objectives, financial situation, and needs. Also, before making a decision, you should consider the relevant Product Disclosure Statement available from your financial planner.