Taxes: You can hate them, you can debate over where your taxes even go, but at the end of the day, we all have to pay them. Taxes stress us out, and nobody wants to end up paying more than they owe. With this in mind, we’ve put together a few tips on how to get through tax time as painlessly as possible.
1. Discuss salary sacrificing with your employer
Salary sacrificing allows you to use part of your pre-tax salary for a benefit such as superannuation contributions or work-related vehicle purchase thereby reducing your taxable income. A salary sacrificing agreement must be agreed upon by yourself and your employer. Salary sacrificing can have the distinct advantage of lowering your taxable income and thereby the amount of tax you are required to pay. Prior to entering into a salary sacrifice arrangement, it is essential to seek financial advice regarding salary sacrifice arrangements. For further information on salary sacrifice arrangements, visit the ATO website.
2. Can you claim your telco expenses?
What do you use for work? If your iPhone, WiFi or iPad is used frequently for work purposes, you can claim it as a work-related expense and get a deduction that way. You’ll have to keep track of the work calls you make or the time you spend online for work to prove that this is the case, but if you remember to do this you can save a substantial amount of money.
3. Check out helpful tax tools
There are loads of great tools out there to help you figure out how to save on your taxes. For example, the myDeductions tool in the ATO app allows you to easily keep track of all of your deductions. Record your car journeys, stay on top of donations, gifts and work-related expenses and save photos of receipts to keep all of your important information in one place. Keep in mind that this tool is designed for use by individuals claiming employee expenses, rather than for owners of small businesses.
Beginning on 1 July 2016, you’ll be able to upload information from the app directly into your online tax return, or send the information straight to your tax agent. It couldn’t be simpler!
4. Donate to charities
Donating to charities and helping the needy should be its own reward, but your donations are also a good thing to keep in mind when tax time comes around. Every donation you make to a registered charity, provided it’s over $2, is tax deductible - just a nice little bonus for the good work you do. Remember to keep the receipt when you make a charitable donation so that you can add them up and claim it as a deduction.
While the amount you have donated isn’t simply returned to you in your tax refund, they are subtracted from your taxable income so you’ll be able to get a certain percentage of the donation back.
5. Deal with your debt
Some types of debt, known as “good debt”, are helpful during tax time. The vast majority, however, are not.
Consider consolidating your debts to help get on top of your finances for the next financial year. If you need a little help with this, try contacting the team at Credit One on 1300 CREDIT (1300 273 348). We can tailor a range of consolidation loans, home loan refinancing and investment property financing, vehicle financing and asset financing to help maintain your cash flow. We also offer many other solutions to help you save time and money, allowing you to effectively manage your personal and business finances.
Speak to us today on 1300 CREDIT (1300 273 348) to see why more than 100,000 Australians choose Credit One for all their personal & business finance needs.
For more of our Handy Tips, why not check out “5 Handy Tips for Buying your First Home”?
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