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Maximise your deductions to the limit for 2015 Posted on October 9, 2018
Make a donation to charity
Some tax savings can make you feel good and reduce your taxable income, which means a bigger refund and potential availability to other family assistance rebates. Make sure any donations to charity are made before June 30 and ask for the receipt to be issued in the name of the highest income earner in your partnership.
Deductions and income
It makes sense that where possible, deductions are claimed by the highest income earner, and income by the lowest. So if you’re earning a lot of interest on your bank account and your partner is in a lower tax bracket, consider keeping the earnings in their name (with both of you as signatories, of course).
Make sure your logbooks are up to date. For motor vehicles this means your logbook needs to be less than five years old.
Working from home
Work is no longer the domain of the office, thanks to the internet. So make sure you keep a diary for four weeks to track your internet usage and the hours you are working from home. Don’t forget to keep receipts for phone and computer accessories too, not just the cost of the device itself.
Claim everything you are entitled to
Make sure you know what you can claim. For example, if you are on the road for work (or work outside) you can claim sunscreen. So if your foundation, lip-balm or moisturiser has an SPF factor, then you may be able to claim them.
Credit card/EFTPOS your expenses
If you are an individual taxpayer the ATO now recognises bank statements as proof of a claim. Many people shrug their shoulders at a $10 claim here and there, but these ad hoc claims can add up to hundreds of dollars over the year. Make it easy on yourself at tax time and reduce your taxable income by handing over your plastic when you purchase.
If you have a rental property and also a mortgage on your home, then it is usually wise to pay interest only on your rental property to maximise your deduction. If you’ve received unexpected taxable income in one year, you might also consider prepaying interest on your rental property to reduce your taxable income. If your property is less than 40 years old, you should also be claiming depreciation on the building and the fixtures.
If you made a capital gain this year on the sale of shares or property and are carrying some poorly-performing shares, then consider selling them prior to June 30 so that your capital loss can offset some or all of the capital gain. This will also ensure that your taxable income won’t be artificially high.
Employee share schemes
Some employees of publicly listed companies receive employee share schemes and this is fantastic, until they realise they may be assessed on this intangible income. Google employees are a great example of those that receive this type of income. Make sure you are aware of what you will be receiving and plan ahead by either salary sacrificing to super, increasing deductions or deferring other income if possible.
Most people are covered for an injury when they’re at work, but forget about the weekend. Income protection protects you away from work and it’s also a tax deduction.