Let’s talk about tax
First things first, congratulations! Why? We’re getting close to that time of year again (tax time) and the fact that you’re reading this blog means that you are one step closer to being prepared and can hopefully maximise your tax return.
Here at Bookssorted we know that tax time can be daunting, gathering all those receipts along with finalising diary notes etc. Rest assured that it doesn’t have to be that way – the team at Bookssorted are here to help.
Our friends at the Australian Taxation Office have listed three golden rules to remember when claiming expenses:
- the money must have been spent for work (not a private expense)
- if the expense is for a mix of business and private use, only claim the portion that is related to business expenses, and
- you must have records to prove the expense.
To get you started we have a list of possible tax deductions below which will help you get your head in the tax return space!
Phone and internet — if you use your own phone or internet for work purposes, you may be able to claim a deduction if you paid for these costs and have records to support your claims. If you use your phone or internet for both work and private use, you will need to work out the percentage that reasonably relates to your work use.
For example, you find that you bring work home with you and finish reports while watching TV at night. You need the internet to complete these reports, which means you can claim some of your home internet charges. Let’s say 10% of your home internet is work-related use and your monthly internet bill is $60 – you can claim $66.
10% work-related use × $60 per month
= $6 work-related use per month × 11 months
We only multiplied it by 11 months to factor in around 4 weeks of annual leave. If you have worked more or less throughout the year, then use that as the multiplier.
Use the same method to find out how much you can claim for your mobile phone.
Of course there are always the old faithful deductions that if you haven’t claimed during the year you can claim in your tax return – which could generate a tax refund!
Seminars, conferences and networking
Have you attended a conference, training seminar or work-related event? In addition to the cost of going to these events, you can claim deductions you incur when travelling for business. This includes airfares, train fares, bus fares and taxi fares.
Magazines, journals and memberships
Work-related magazines and journals can be claimed as an expense and are a great way of keeping up to date in the industry.
In addition, if you’re a member of a work-related association, you can claim these fees and help minimise your tax.
HOT TIP: Bring expenses forward by paying for them in advance so you can claim them in this financial year. All you need is the invoice. Just make sure you make a note in your diary or on the invoice if you claim it in this financial year so you don’t claim it again next year.
Superannuation
Salary sacrificing your super contributions not only helps boost your retirement nest egg, it could also reduce your taxable income.
As we get closer to the end of the financial year, check to make sure you’ve made the most of the $25,000 concessional contribution cap.
Important dates: Bookssorted will be paying all June super in June, this is the only month of the year we pay as we go to ensure that you maximise the $25,000 concessional contribution cap. The last super payment for the financial year is forwarded to your super account via the super clearing house on 18 June, after that date all super will go into the next financial year i.e. 2021-2022
As always the Bookssorted team are here to help, but always make sure you talk with your accountant and check the ATO website before you submit your tax return.