Nicole Pedersen-McKinnon* reveals ten last-minute things people can do to pay their tax bill.
The race across the tax year finish line has begun… and you’ve only got a few days to stop the Australian Taxation Office (ATO) from winning.
Literally days.
All BPay transfers to move and maneuver money to lower your tax bill should probably be made by Monday, June 27.
Here are ten last-ditch ideas to keep your dose.
spend a lot
Get expenses, but only if you need what you buy.
For example, nurses can claim uniforms – there are even weird, wonderful, or even outrageous things for which you may be able to claim deductions.
To learn more about what you can claim for your industry, visit the ATO website.
The biggest gains are where expenses push you into a lower tax bracket – so below the 2021-2022 taxable income thresholds of $18,201 (there is no tax up to this amount), $45,001 (19 percent to here), $120,001 (32.5 percent up to here), or $180,001 (37 percent down and 45 percent once you reach this amount).
Sniffing for receipts
Fast – fill out those mileage logs and start looking for your receipts.
Again, the easiest and best way to cut your taxes is probably deductions.
So think of all the costs associated with your income… you might be able to claim it.
For example, if you’re a nurse, what about dry cleaning? Check the car costs if you are transporting equipment.
And don’t forget to declare your working-from-home expenses.
Weigh a prepayment
If you’ll likely get a bigger tax bill this year than next, you can pay some deductible expenses upfront.
Even worth 12 months.
The big ones are income insurance and interest on investment loans.
Just ensure this is better than other alternative uses of the money.
deferral
This may seem strange, but if this has been a prosperous year and next year may not be, do what you can to push more revenue into next year.
Think bonuses, commissions, overtime… again, keep that tax bracket low.
If this year has been a little lean, it might be a good tax time to de-stress assets, such as stocks.
If your spouse earns less than $40,000, an after-tax super contribution of $3,000 will give you a tax credit of up to $540 in your account.
That’s an outright discount… in a matter of days.
This is called a partner contribution.
Increase your savings
OK, I’m getting a little carried away with this because it’s not technically a tax tip, but listen up if you’re making less than $56,112 a year.
That’s the threshold at which, if you make an after-tax super contribution of $1,000 before June 27 (due to BPay’s delay above), you’ll get up to $500 from the government.
This is called a “co-contribution” and goes into your super fund rather than your pocket.
But while being smart about money, work with it; if you don’t use it, you lose it.
Make good (ty) money
For all Aussies who own, many don’t claim the deductions they might have.
In a nutshell, you can deduct anything related to the management or maintenance of your property: brokerage fees, repairs, rates, and, again, loan interest.
It’s worth getting a professional depreciation schedule — accountant or quantity meter — if you don’t already.
This is because your biggest boost could come from the depreciation of furniture, appliances, and renovations, claiming it over several years.
Have you been putting off work-related or investment-related travel?
A work visit before June 30 and a property inspection can lower your taxes – at least for the business part.
Experts also say that work-related training is one of the most overlooked but effective conclusions.
Higher taxpayers pay just over half for donations to a registered charity because they are tax-deductible.
And if you have some money to spare, people can use it right now.
If you make more than $90,000 as a single or $180,000 as a couple and don’t have private hospital coverage, buy it.
Otherwise, you’ll pay the Medicare Levy Surcharge penalty, which can be up to 1.5 percent.
This is often more than the cost of the coverage itself.
OK, there’s not much left from this year but put it in place for 2022-23.
*Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com.
This article first appeared on au.finance.yahoo.com.
