Our Top 10 Tax Tips for 2016
It is that time of year again where we gather our receipts and statements ready to prepare our tax returns.
This year make sure you are claiming all tax deductions you are entitled to by following our top 10 tips:
- Income Protection Insurance
Income protection insurance can protect your income whilst you are unable to work, it is also 100% tax deductible.
- Voluntary HELP Debt Repayments
Up until 31 December 2016 any voluntary payments of your HELP debt greater than $500 will be eligible for a 5% bonus reduction. As of 1 January 2017 this bonus will be removed.
- Logbook for motor vehicle
If a considerable percentage of your motor vehicle use is work related then using the ‘Logbook method’ to claim a tax deduction for the use of your vehicle may give you a better tax result.
It is important to remember that the logbook needs to be completed for a continuous 12 week period and must include all trips of the vehicle. Once completed the logbook is valid for five years.
- Private Health Insurance
Consider Private Health Insurance if you are single and earning over $90,000 (Adjusted Taxable Income) or a family with combined income over $180,000 (Adjusted Taxable Income). If you fall into these categories and do not have appropriate Private Health Insurance cover you are required to pay up to an additional 1.5% tax on your income.
- Mobile Phone Costs
If you use your mobile phone for work related purposes you are entitled to claim the average work related percentage.
You equate the work related percentage by calculating the work related calls vs total bill over a continuos 4 week period as a minimum.
- Travel Related Costs
The ATO produce a Tax Determination annually which lists reasonable travel and overtime meal allowances that are tax deductible and are not subject to any further substantiation requirements.
If you have travelled for work over the financial year it is in your best interest to refer to this tax determination.
- Claim home office (running) costs
If you perform work from home you may be able to claim a tax deduction for the costs incurred including heating, cooling and lighting if a diary is kept over a four week period showing the amount of work carried out from home over that period. A fixed rate of 45 cents per hour can be claimed as a tax deduction.
- Depreciation Schedule for Rental Property owners
One of the most overlooked but most beneficial negative gearing opportunities is the ability to claim a percentage of your rental properties construction costs as well as fixtures and fittings.
A quantity surveyor report is required to determine what can be claimed but the tax savings may be in substantial every year.
- Donate to charity
Donations made to charities listed as deductible gift recipients over $2 are fully tax deductible. It is important to keep the receipt of donation in order to claim the tax deduction.
- Have AJD Accountants prepare your tax return
A great accountant can save you more in tax that the cost to prepare the return. As well as the tips above there are several occupation specific costs that you may be entitled to that AJD Accountants are aware of and can help you save even more!
Don’t forget the cost to prepare your return is tax deductible!
