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Tax Time Tips

Tax Time Tips

Here are a few things to consider coming up to tax time for individuals:

– Save on tax by making superannuation contributions – You can claim a tax deduction for personal contributions. You’ll need to complete and lodge a valid notice of intent with your super fund. This valid notice needs to be acknowledged (in writing) by your fund before you can claim the deduction in your tax return. Be careful to make sure you don’t exceed your contribution caps.

 

-Make your claim for home office expenses – With many of us working from home during the coronavirus crisis, there are several home office expenses you may be able to claim as tax deductions including phone and internet, computer consumables and home office equipment.

 

-Donations – If you gave a gift or donation to an organization (e.g. your favourite charity), you may be able to claim a tax deduction. However, there are specific rules that apply.  Generally, you can claim any donation you made above $2 if it was to a ‘deductible gift recipient’. For gifts, different rules apply depending on the type of gift.

 

And businesses:

-Claiming the temporary full expensing of business assets – This is a rule that may allow you to claim eligible business assets, like vehicles, machinery and equipment in the year of expenditure. If your business meets the eligibility tests, you may be able to claim asset purchases in your tax return for 2022.

 

-Prepaid Expenses – Prepaying some expenses before 30 June can increase your allowable deductions for the financial year in which they are paid. Eligible expenses include those that have a service period of 12 months or less, for example, annual policies, utility bills or professional subscriptions. Keep in mind that if you claim them this year, you won’t be able to claim them next year meaning you may have more tax to pay next year.

 

-Paying superannuation before 30 June – If you pay your superannuation before 30 June you will be eligible for a tax deduction in your 2022 tax return. As with the prepayments above, making these contributions early will mean you wont get a tax deduction next year for it.

 

The above tips will depend on your personal circumstances. Please contact us today if you would like to find out how they may benefit you.