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Mistakes can be costly for individuals and businesses during tax season, which makes the need for professional help very important. According to the Australian Taxation Office (ATO), many commit mistakes during tax time, from claiming for personal expenses to forgetting to keep. Such blunders can have consequences on one’s tax return.
The end of financial year is just around the corner but that doesn’t mean there isn’t time to take advantage of the many opportunities to help you realise your tax-saving potential.
The ATO has a breakdown of tax brackets to help individuals identify which bracket they belong to and get a good idea of how much they will owe in tax payments.
Proper documentation of all financial transactions—like keeping receipts—is essential in identifying which items one can claim as tax deductible. The ATO has encouraged taxpayers to keep their receipts to avoid over claiming.Working with a bookkeeper will make the process easier for individuals but for those who don’t using any of the many bookkeeping apps is an option.
The ATO has identified major mistakes taxpayers make and one of them is failure to claim the right deductibles. Simply put, some are unable to enjoy tax savings because they either forget to claim for certain items or have absolutely no idea which items are tax deductible.
Making contributions to charitable institutions is one effective way to reduce your taxable income.These organisations must be registered with the Australian Charities and Not-for-profits Commission (ACNC) for donations to qualify as deductible gifts.
Individuals who contribute to their spouse’s super funds may be eligible for more tax savings as long as the partner is either unemployed or is a low-income earner (makes less than $13,800 p.a.).
The end of financial year offers business owners the opportunity to add to their revenue-generating capabilities and enjoy tax savings at the same time. All purchases—items used for making profits like computers, mobile device, etc.—made during the financial year may yield tax savings.
Car-related costs, like petrol, are tax deductible. Individuals who own cars that they use for work-related travel can claim only for the mileage used in work-related activities. This will not include the travel to and from work.The ATO has a comprehensive guide on the scope of this deductible.
Income from a rental property as well as costs of renovations are tax deductible.
Part of the reason why many don’t enjoy the tax-saving benefits during the EOFY is they simply forget. There are many expenses taxpayers forget to claim like electricity, printer ink, bags, mobile devices, even seminars.
As the financial year winds down, it’s important for individuals to plan for the one about to come with the help of professionals to make transitioning to the next EOFY easier.Get help from a Strategic Wealth Planner. Talk to us to discover more tax-saving guides by scheduling a consult. Click this link to book your appointment.This article is published by R J Sanderson and Associates Pty Ltd ABN 71 060 299 783. This article contains general information only and is not intended to represent specific personal advice (Accounting, taxation, financial or credit). No individual personal circumstances have been taken into consideration for the preparation of this material. It is recommended that you obtain your own personal professional advice before making any financial or business decision.