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Money Mummy’s Top Tax Tips

written by Shelley Marsh 17/07/2013
Top Tax Tips

No one likes tax time, well maybe except accountants (they love that sort of thing), so I have decided to put together my top tax tips to help you get through tax time as painlessly as possible.   Here goes:

(1)    My number one golden rule when it comes to tax is that if the Taxman owes me money, (think refund), I get my tax done as quickly as possible.  If it is likely that I owe the Taxman, for example I have made extra cash through saving or investments, I don’t submit my return until the 31st of October if I am doing it myself.  If you use a tax agent, you can push it out even further.  Most tax agents have an extension until the 31st of May, but confirm with your agent to be sure.

(2)    Consider using the ATO’s online tax preparation and lodgement service called e-tax.  It’s free and scarily enough, you can get a lot of your data prefilled in from the tax departments records.  This means that for a lot of things such as your income from your employer, centrelink payments and bank interest, you just have to check that it is correct.  It means that relatively simple returns are pretty easy to handle yourself and most refunds through e-tax are issued within 12 business days.  Check out their website at http://www.ato.gov.au/Individuals/Lodging-your-tax-return/E-tax/ to decide whether it is for you.

(3)    Make sure you are on top of what deductions you can claim.  The ATO outlines specific deductions for many occupations including nurses, hairdressers, teachers and even “Adult industry workers” so check out the fact sheets at http://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Deductions-for-specific-industries-and-occupations/ and make sure you are not missing out on any deductions.

(4)    The  ATO considers electronic records to be just as valid as paper ones.  This is true of both documents that were electronic to start with (for example receipts for online purchases) and documents which you have originally received in paper form. This means that you can now scan all your relevant paper receipts and throw away the original.  Just make sure you also keep an additional electronic back up :-).

(5)    Car usage is the biggest single deduction that you may be able to claim as an employee.  Travel to work is generally not allowable, but you can claim the cost of using the private motor vehicle if it is being used for work purposes such as travel between work locations visiting clients/customers etc.  If you want to make a claim the best way is to keep a log book to substantiate your claim.

(6)    If you have a flexible employer who allows you to work from home you may be able to claim this through your tax.  To cover expenses such as heating, cooling, lighting and depreciation of general office furniture, you can either claim your actual expenses (but you will need to keep a diary of those expenses and hours worked) or you can claim a fixed rate of 0.34c per hour worked.  If you use the fixed rate, you will need to keep a diary to record the amount of time you use your home office for work purposes.  Expenses such as stationary, telephone, internet and computers are claimed separately.

(7)    Make sure that any investments or savings you have are in the name of the spouse paying the lowest tax rate.  This is because dividends and interest are taxed at your marginal tax rate.  Watch out for investments in the names of your children as they may attract punitive tax rates as explained in my previous post “Three things you really need to know when saving and investing for your child”

(8)    Click here to see the latest marginal tax rates.  You can now earn $18,200 before you have to start paying any tax.

If you liked this post, you might also like:

How To Teach Your Child About Money

10 Easy Ways To Save Money

How To Pay Off Your Mortgage Faster

Top Tips For Getting Rid Of Your Credit Card Debt

 

*Please note this is for your general information only and does not constitute financial or tax advice.

8 comments

Author Bek Mugridge (@bekmugridge) 19/07/2013 at 4:43 pm

Great tips X

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Money Mummy 19/07/2013 at 9:48 pm

I am glad you liked them! Thanks for stopping by. Money Mummy.

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Marleisa 19/07/2013 at 9:57 pm

The one thing stopping me from getting my tax done is the box of overflowing receipts I have. Every year I say I am going to keep them in order but there they are, all squished into a box. I hate sorting them!!

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Money Mummy 20/07/2013 at 10:49 pm

Yes – I agree with you on this one! It is probably the worst part! Money Mummy

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Janet @ Redland City Living 20/07/2013 at 11:40 am

I am dreading doing our taxes this year – I was made redundant, we finally sold the two blocks of land we subdivided, and I started my own business – I think the accountant can have the headache this year!

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Money Mummy 20/07/2013 at 10:44 pm

Yes it sounds complicated – definitely a job for the professionals!

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Jody at Six Little Hearts 20/07/2013 at 8:32 pm

Great tips! I love tax time! We always get a big refund so it’s like Christmas for us. I am very organised year-round and store my receipts and records where I can just grab and go to the accountant as soon as the group certificate arrives.

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Money Mummy 20/07/2013 at 10:50 pm

Yes there is nothing like the joy of a big refund! Congrats on being so organised that is very impressive. Money Mummy

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