WITH the Australian Taxation Office revealing it will speak to more than 350,000 taxpayers this year in a bid to crack down on dubious tax returns, it is now more important than ever to understand what can and cannot be claimed.
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With increasing numbers of taxpayers submitting their tax return online these days, it is important to know what you can do in order to maximise your refund.
Those who don't know exactly what they are able to claim can end up short-changing themselves.
To help locals prepare for tax time and maximise their refund, here are five steps to follow:
Step 1: Lodge early - While you might be dreading going through the paperwork and receipts for your tax return, the sooner you start the process, the better off you will be.
Complete your tax return early and let your refund boost your bottom line.
Step 2: Get private health insurance - Singles with a taxable income of $90,000 or more and no private health cover, will face a Medicare Levy Surcharge - which can be quite costly.
If you don't have private health cover and you earn $90,000 or more, taking out private health insurance now will help you to decrease the surcharge you have to pay.
Better yet, provided your health cover is continuous, you will be able to avoid paying any surcharge in the next financial year.
Step 3: Boost your superannuation - salary sacrificed super contributions are taxed at 15 per cent, which is likely to be lower than your marginal tax rate.
And, because any super contributions come out of your before-tax income, they are not counted as assessable income for taxation purposes.
Step 4: Claim against your investment property - Many property investors don't realise they can claim for a range of expenses on their property, including but not limited to: agents' fees, body corporate fees, advertising for tenants, building maintenance and repairs, cleaning costs, insurances, home loan fees, interest payments, council and water rates, and depreciation deductions.
Of course, given that there are so many different claimable expenses available to property investors, it is worth speaking with a professional to make sure nothing is missed.
Step 5: Take out income protection - Income protection insurance is a claimable tax deduction.
So if you already have a policy and can afford to pay your premiums for the next 12 months in advance, doing so before July will mean you are able to claim the cost as a tax deduction for the 2014-15 financial year.
■ Richard Windeyer is a mortgage broker with Mortgage Choice. His advice is general in nature and readers should seek their own professional advice. Phone Richard Windeyer on 1800 01 LOAN.
