Talking Tax – Top10 Tax Saving Ideas

With 30 June just around the corner, we’ve come up with these last minute tax saving ideas for individuals.

1. Keep your receipts.

Keeping good records is the best way to make sure you claim every expense you are entitled to. Make sure you’re organised and it’s easy. Spend 5 to 10 minutes per week organising your paperwork and storing the information relevant to your tax return in a safe place.

2. Make tax-deductible donations.

Donations to tax-deductible charities are an easy way to reduce your taxable income. Keep records of the money that you donate and include that on your tax return. This will reduce your income and in turn reduce the tax you pay. Win Win!!

3. Buy some work related uniforms, protected clothing and boots.

If protective clothing is required for your work, or if you have an ATO approved or compulsory uniform, then the cost of purchasing these items can be tax deductible. Once you have the clothes, you can claim alterations, embroidery, laundry and dry cleaning too. Keep your receipts!

4. Buy work related tools

If you are a tradie, then any tools you buy for work purposes can be claimed (outright or depreciated). If you have an office job, then a laptop or IPad might be deductible if you use it for work purposes. Don’t forget ink cartridges, paper, sun protection items, manuals and stationery.

5. Pay up your union dues and professional subscriptions.

If you owe money for your union dues or for subscriptions to any work-related organisation that you are a member of, pay up the amount owing before 30 June and claim that on your tax return. Payments up to 12 months in advance are usually deductible in the year of payment.

6. Make tax-deductible contributions to your superannuation fund.

If you are under the age of 65, you are allowed to make concessional contributions to your superannuation fund of up to $25,000 pa. This amount includes any contributions that your employer may have made on your behalf, such as the 9.5% SGC. If you have available cash, you can top up your super to the $25,000 concessional cap and claim the amount in your personal tax return. This will reduce your taxable income and reduce your tax payable. Note that any contributions made, must be received by the superannuation fund’s bank account prior to 30 June to make a claim.

7. Review the work usage of your mobile phone.

If you use your mobile phone for work purposes, review the percentage of use for work purposes and claim a percentage of your total telephone costs as a tax deduction. The taxation office would expect you to fully examine a month’s telephone bill to determine the work use percentage. Keep this amongst your taxation records.

8. Home Office Expenses

Don’t forget that if you do any work related things at home you can claim for part of the cost of a home office. So, that online training course, filling in time sheets, issuing invoices or writing and proof reading a report, all add up. Work out the hours spent and talk to your tax agent about it. Your internet cost may be deductible too.

9. Travel Costs

If you have to travel for work purposes, then you can claim for unreimbursed amounts of your motor vehicle costs, accommodation, e-tags, parking, trains, trams, buses and some meal costs. Estimate your kms travelled and keep records of all the rest.

10. Realise capital losses.

If you have made a capital gains throughout the year, consider selling other assets and/or investments which will result in a capital loss. This capital loss can be offset against the capital gain to reduce the tax payable on the gain.

Of course, these are all last minute tactics and the information is general in nature. The best way to minimise your tax is to take a longer term view and structure some planning to utilise tax savings to build long term wealth. If you would like to discuss your personal circumstances with a taxation professional, call Potts & Schnelle now (02 6033 2233), mention this article, and receive a free initial appointment.