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10 tips to maximise your tax return before June 30

·Director Of Tax Communications, H&R Block
·5-min read
Compilation image of crowd of people walking with pile of cash
Make sure your tax affairs are in order ahead of the end of the financial year. (Source: Getty)

With just a few weeks to go until the end of the tax year, you might think it’s too late to knock your taxes for the year into shape. However, even this close to the end of the financial year (EOFY), there are still some last minute planning opportunities to maximise your refund for the year.

So, what should you be doing as we head towards June 30?

Read more from Mark Chapman:

Here are 10 tips to get ahead.

1. Gather your records

Take some time out to gather together all the information you will need to help you prepare your tax returns, including invoices and receipts for work-related expenses and any bank/credit card statements that contain items of work-related expenses that you no longer have (or never had) receipts or invoices for.

If you’re not sure if it’s claimable, keep the receipt or invoice to one side and discuss it with your tax agent.

Remember, if you don’t have the paperwork, you can’t claim a deduction, spare yourself a stressful document hunt and get it all together in advance.

Also, if you’re claiming any expenses that have a work-related element and a private element (such as for the use of a personal mobile phone) set some time aside to work out what a reasonable apportionment is for the work-related bit.

2. Calculate your home office costs

If you are in employment but work from home, either occasionally or all the time, you are entitled to deductions for costs arising from working at home.

The expenses that you can claim include:

  • Heating, cooling and lighting

  • Cleaning costs

  • Decline in value (depreciation) of home office furniture and fittings, office equipment and computers (for items over $300)

  • Computer consumables, stationery, telephone and internet costs

  • Items of capital equipment (such as furniture, computers and associated hardware and software) which cost less than $300 can be written off in full immediately

And remember, any purchases you make now can be deducted in this year’s tax return which, from a cash flow point of view, helps to minimise the time between purchase and tax deduction.

3. Update your log book

If you use the log-book method, now is the time to check that your log-book is up to date and that you have all the receipts, invoices and records of journeys which you will need to calculate and substantiate your claim.

If you use the cents per kilometre method, you will still need a record of all work-related journeys during the year.

The Australian Taxation Office (ATO) will be looking particularly closely at car claims this year, with average claims expected to be substantially down due to COVID-19, so it’s important that your records are correct and complete.

4. Log your mobile phone usage

If you used your personal mobile phone for work purposes, you can claim a deduction for the business related use.

Make sure you have your phone bills collected together and have kept a log of your business/personal use over a four-week period. That percentage can then be applied to the whole year.

5. Make a charitable donation

Make a last minute charitable donation. You can claim a deduction for donations of more than $2 to a registered charity provided you have a receipt for the donation.

6. Prepay some expenses

You can claim a tax deduction this year for expenses which wholly or partly relate to next year.

So, if you have some spare cash, consider paying things like union fees, professional subscriptions and annual insurance premiums in advance in order to accelerate the deduction.

7. Buy a new handbag

If you use a bag for work, to carry papers or a laptop perhaps, you can claim a tax deduction for the cost. That could include a briefcase, a backpack or a handbag, whichever suits your needs.

8. Make a tax deductible super contribution

If you have some spare cash, look at making a personal contribution into your super fund.

Provided the total amount of your contributions (including the contributions made on your behalf by your employer) does not exceed $27,500, this can be a great way to boost your retirement savings and claim a tax deduction for the personal contribution.

The payment must be made by June 30 and you need to advise your super fund that you’ve made the payment by the time you lodge your tax return.

Your super fund or accountant can give you guidance on how to complete the form and there’s a standard form on the ATO website.

9. Offset capital gains against capital losses

If you’ve disposed of shares or any other form of investment and you know you’ve made a capital gain, take a look at your investment portfolio and consider disposing of any assets which you know are sitting at a loss.

Compilation image of share market on phone screen with pile of cash
Review your portfolio before the end of the financial year and think about offloading assets which are at a loss. (Source: Getty)

The resulting capital losses can be offset against the capital gain.

Be careful though.

The ATO takes a hard line against so-called “wash sales”. This refers to the sale of an asset before the year end and the purchase of a substantially identical asset immediately after the year end.

The ATO regard the purchase and the sale as effectively the same asset and have issued a tax ruling which states that they can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties.

10. Seek expert help

Speak to a tax agent like H&R Block which can identify exactly what you need to do to get into shape for the 2022 tax season and maximise your deductions.

Mark Chapman is director of tax communications at H&R Block.

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