The 2020 fiscal year officially ends on 30 June, and the months of July through to October mark tax season.
But before the next financial year begins, there are a few things you should sort out to maximise your tax refund, according to tax expert Adrian Raftery.
Here are some things you should do before the month is up:
1. Claim your ‘free money’: Top up your super
“No matter your income level, superannuation is a great tax reduction tool. Contribute up to $25,000 into super,” said Raftery.
If you earn less than $38,564, you can make good use of the Superannuation Co-Contribution where the government will match your contribution by half, up to $500.
And if you make less than $37,000, your partner can put in up to $3,000 into your super, and they’ll get the 18 per cent spouse contribution rebate.
2. Make next year’s claims this year
The Covid-19 pandemic has battered most businesses – so if you’re expecting less income next year, Raftery advises bringing forward your deductions into this tax year.
“Stocking up your home office with stationery, laptops and printers or prepaying subscriptions and interest on rental properties for up to 12 months in advance are simple ways to reduce your income before 30 June,” he said.
3. Clock your work-from-home hours
The Australian Taxation Office has made it easier for the thousands of Australians who have been forced to work from home by increasing the work-from-home tax ‘shortcut method’ from 52 to 80 cents per hour.
But you might want to keep a log anyway, said Raftery.
“Whilst you can use the ATO’s shortcut method of 80 cents per hour it will probably be less than actual deductions for the work-related portion of home telephone, internet, stationery, printers, computer equipment and consumables together with the 52 cents per hour claim for electricity under the fixed costs method.”
4. Fill your car log book
Do you use your car for work purposes? You can claim the work-related portion of that. Keep a 12-week log book, Raftery advised.
“Make sure that you keep all costs associated with the running of your car for the whole year, not just the log book period,” he added.
5. Purchase a new asset for your business
Don’t forget about the $150,000 instant write-off for new business assets – this won’t last forever. The threshold will revert back to $1,000 for small businesses with turnover of less than $10 million on 1 July.
“There is no limit to the amount of assets that you can purchase but beware you only get a percentage back and cashflow may suffer. The threshold effectively is $165,000 for those that are GST-registered as a 10 per cent GST credit is claimed in quarterly Business Activity Statements.”