It’s that time of year again and everyone is thinking about one of life’s few certainties, taxes. It’s awful if unlike lots of people you are expecting a bill instead of a return, especially if you have to listen to everyone else talk about how much awesome money they are getting back and what wonderful things they are going to spend it on. Even worse than expecting a bill, is an unexpected one so here are our top tips for avoiding a big bill at the end of the financial year.
Overestimate With Centrelink
If you get Centrelink payments like family tax benefit it is in your best interests to overestimate your income. Trying to be spot on in order to squeeze out a few more dollars each fortnight is not worth it for a potential bill at the end of the year. Instead overestimate a little, learn to live within the means of what you have and enjoy the surprise at the end of the financial year when you get a lump sum back because they have underpaid you.
Know Your Business Deductions
If you are running a business, even if it’s only a little business at home, know what you can claim and make the most of everything. Become a master of the phrase “Could I get a receipt for that please”, even if you’re not sure it’s a claim. You would be surprised what you can claim if you work from home too. Did you know if you have an office/designated workspace a percentage of your power bill is deductible?
Get What You Pay For
Good money for good professional advice is money well spent. Seeking help and advice with lodgement of your tax return from a registered accountant is a good investment and a great chance to ask questions and learn more for future returns you do yourself. The cost is also fully tax deductible the following year, so you really can’t lose.
If you’re a higher income family and you don’t have health insurance you will have to pay extra tax (we’ve all seen the ads on tv). It really is worth considering though; it is a great investment for your family and could make hundreds of dollars of difference to your tax return.
Buy Up Before June 30th
If you run a business big or small and want to offset as much as profit as possible, you will most likely feel an urge to shop in June each year. Stationary, office furniture, tools, anything your business requires, to be used as an offset against your profit for the year
If your business is registered for GST make sure you put this aside from every source of income on a regular basis, don’t even count it as income. Pay your GST quarterly and don’t ever let yourself get behind.
If you are fully or sustainably self employed you can claim a 100% deduction for superannuation contributions you make for yourself. (check eligibility with the ATO)
If your spouse earns less than $13,800 a year you can claim up to $540 for contributing on their behalf. (Check eligibility with the ATO)
Be Prepared for your Bill
If you are expecting a bill, put money aside each month throughout the year and be prepared. Don’t wait until crunch time and have to find lots of money you don’t have or be paying back a tax debt for the next year while you should be saving for the following year’s bill instead.
Do you have any great tips for helping with the tax bill in your household?