Most people love tax time. Not actually completing the paperwork of a tax return, but the end result, which can be some money returned to your pocket. 

If you have everything ready to go to lodge your tax return, good on you. If you’re yet to get everything together, we’ve got a few tips for this year’s tax return and to help you get prepared for an easier tax return time next year.

Without further ado, here’s our top 5 tax tips for 2021.

1. Be organised and keep records

The number one rule for any and all financial years - keep records! No one likes a last minute rush, so why put yourself through it? 

As you start accumulating expenses throughout the year, take a photo or copy of the receipts and put them into a file on your computer. This will make your life ten times easier when it comes to tax time.

Remember, you almost always need proof for your claims, so keep them on record, ready for when an audit comes your way.

We won’t bore you with the ins and outs of record keeping. You can check out the rules/tips from the ATO on their individual tax hub.

If you haven’t been keeping your receipts so far to the side, don’t worry, we’ll run through some receipts you might want to dig up based on the below.

2. Tax deductions

The main way to reduce your tax payable is through tax deductions. If you’ve been in the workforce for a while now, you probably know the drill as to what you can and cannot claim. 

You are able to claim up to $300 in total in deductions without receipts. Anything above this, you’ll need written proof aka a receipt. 

We service a number of education and healthcare professionals so we thought we’d provide a little information on these areas of profession to help you out this tax time. 

If you’re a healthcare worker you can claim things such as:

  • Self-education expenses.
  • Union and professional association costs.
  • Practising certificates if required. 
  • Car expenses outside of to and from work.
  • Uniform expenses not covered by your work.
  • Agency and commission fees you pay personally.

As an educational professional, there’s also a range of deductions you can claim too such as:

  • Union fees and professional memberships.
  • Journals and other relevant subscriptions.
  • Home office expenses (internet, electricity etc.).
  • Self-education for related self-development.
  • Travel costs related to school camps and so on (keep a logbook).

These are the sort of receipts you want to keep track of to show proof. 

However, you can claim up to a certain amount of deductions without proof, but it’s always best to keep track of everything. 

Have a chat to your registered tax accountant to see what you can claim without receipts to help you get ready for next year.

3. COVID-19 specific deductions

Again, this year, due to the COVID-19 pandemic there has been additional support measures put in place by the Australian Government when it comes to claiming deductions.

These include the temporary ‘shortcut’ method of claiming a rate of 80 cents per hour for all of your cost of running expenses whilst working from home. 

For up-to-date information on these types of claims, we recommend visiting the ATO’s COVID-19 hub.

4. Super contributions

One way you can reduce your tax each financial year is to chat to your employer to see if you’re able to make super contributions via salary sacrifice. 

These contributions are taken from your pay before tax is taken out and are called concessional contributions. These payments are taxed at 15%, so long as you haven’t exceeded the concessional contributions cap.

Depending on your circumstances, there may be other ways you could reduce your tax at tax time through your super. You can find more information on the super related offsets on the ATO website.

5. Lodging your tax return

Everyone has their own preference, but if you’re looking to maximise your tax return, it’s worth shopping around for an affordable registered tax agent to help you submit your tax return.

Using a registered tax agent does mean you’ll need to be a bit more organised so that they  can help you as best they can (keep your receipts together in one place).

In addition to your other deductions, each year Australian’s can also claim the costs of managing your tax affairs from the previous financial year, such as use of a registered tax agent to lodge your tax return on your behalf.

Whilst some of these may be your basic tax tips, it’s worth having a refresher each year particularly as things are changing when it comes to working from home during a pandemic. 

We hope tax time brings you a little joy this year!

If you’re looking at ways how you can manage your tax and income more effectively, you can chat to our Financial Planning team for advice on managing your finances. 

Book an initial financial planning consultation for as little as $150 to get you on track!

Disclaimers
1. Any tax information provided is a general statement and does not constitute tax advice. We recommend that you seek independent tax, legal and/or financial advice where appropriate.
2. Tax laws are subject to change. For the latest information regarding Australian taxation laws, visit the ATO website or chat to your accountant or financial advisor.