Tax Return Hacks: how to maximise your Tax Return
Is it the end of the financial year already? Before you know it, you might find yourself joining thousands of other Australians in asking, "How can I increase my tax return?" In fact, it’s among the top 10 most searched pieces of advice on google. However, with so much information out there, it’s easy to get lost. So we invited our founder and CEO, Shivani Gopal, to share some tips to make your life easier. As a finance expert, we thought you might like some of her handy tax tips on increasing your tax return this year, so you can use the spoils to treat yourself to something you really deserve as opposed to filling those old tax coffers!
1 - Claim work from home expenses
Have you been working from home through the pandemic? It doesn't matter if it was just for a few weeks or months or the financial year - don't miss out on your tax savings! The ATO introduced a shortcut method that allows taxpayers to claim a flat rate of 80 cents per hour of work conducted.
This new method will cover all the expenses related to working from home, i.e. a new work desk, chair or stationary. The Method is designed to save you time and the paperwork and give you an easy option when claiming, but be aware that this option will not allow you to claim an asset's depreciation. So, evaluate if this is the right option for you.
Currently, you are allowed to claim expenses for the following periods:
- March 1 to June 30, 2020, for 2019-20 tax returns; and
- July 1 to June 30, 2021, for 2020-21 tax returns.
2- Claim Self-Education related expenses
The world slowing down over the last 12 months has been the perfect time for many people to invest in themselves and their education. Have you spent any money investing back into your career? If so, you could be in for a nice little tax deduction and a potential boost on your tax return. Self-Education expenses can be deductible if the course you are undertaking has a connection to your current employment and it:
- Maintains or improve the specific skills or knowledge you require in your current job, or
- Results in, or is likely to result in, an increase in your income from your current job.
You cannot claim a deduction for self-education expenses for a course that does not have a sufficient connection to your current employment.
Don't forget that you may be able to claim your Remarkable Woman Membership! Investing in yourself has never been more affordable. You’ll find courses and resources within our membership to help take your career to the next level, valued at over $600 per month, but priced at $39! It also includes your 1-to-1 mentoring; which alone would cost hundreds.
3 - Claim after-tax superannuation contribution
Adding to your super can add to your hip pocket in addition to your retirement savings, too - come tax time! Any contribution made after-tax to your super is tax-deductible and can be claimed. It will be taxed at 15% if you earn under $250,000 a year, or 30% if you earn $250,000 or more a year.
It is also important to remember that you can only claim a maximum of $25,000 per financial year before financial penalties apply.
Other contributions that count towards this cap include:
- Any compulsory contributions paid by your employer
- Salary sacrifice contributions
- Notional taxed contributions if you're a member of a defined benefit fund.
4 - Claim Income protection Insurance
And then there's insurance! It's a smart thing to do when it comes to managing your personal risk and comes with a nice tax deduction as an added benefit!
Currently, only 2% of Australians claim a tax deduction for income protection. So you may be missing out on increasing your tax return right there. Generally speaking, if your income protection insurance is not linked with your supper, you can claim it.
5 - Think about your finances during the whole year, not only during tax time
The truth is, many Australians only think about their yearly finances when it comes tax time, but looking after your finances on an ongoing basis is also considered self-care. A lot of people avoid thinking about this due to their money mindset or money beliefs, stemming from their childhood or different life events. Take a look at our article, "How to improve your money mindset", which will help you change your mindset to achieve some serious financial goals and lead you towards achieving your financial independence.
While we’ve summarised our top 5 tax tips, remember that this article covers tips generally and you’ll still need to speak with your accountant to benefit from personalised advice.
Shivani’s put together fantastic money resources such as a Budget Calculator you can find in our Signature Membership. She also wrote the must-read article "How to take control of your money" in 45 minutes". If you have not yet read it - it’s a game-changer if you plan to skyrocket your finances for many financial years to come.
Our Signature Membership has many resources for you to take your finances to the next level, and it's likely to be tax-deductible! You may be able to claim your membership as early as this year if you join us before June 30 if you’re using it to future your current career.
Learn more about all the fantastic benefits of our signature membership!