It’s that time of the year again when we start getting our tax affairs in order and if you’re smart about it you can look forward to a tax refund. To get the most out of this time of the year I strongly advise finding an accountant to do the work for you. Their cost will be justified through the knowledge they bring to the table and their time is also deductable but if you’re not that way inclined here are some tax time tips that might help.
For most of us work related expenses will be where our focus lies come tax time. To claim a work related expense you must have spent the money yourself and not been reimbursed, must be directly related to earning your income and you must have a record to prove you paid for it. If you are to meet these simple criteria you may be eligible to claim the following:
Vehicle and travel expenses – This does not normally include the cost of travel between work and home but if you use your car for work or work in different locations then you may be able to claim a deduction.
Clothing, laundry and dry-cleaning expenses – To legitimately claim the cost of a uniform, it needs to be unique and distinctive. For example it contains your employer’s logo, or is specific to your occupation, like chef’s pants or coloured safety vests.
Gifts and donations – the gift must truly be a gift. A gift is voluntary transfer of money or property where you receive no material benefit or advantage.
Home office expenses – costs could include your computer, phone or other electronic device and running costs such as an internet service. You can only claim the proportion of expenses that relate to work, not private use. Be careful when claiming home office relate expenses because you don’t want to loose your principle/main residence capital gain exemption.
Interest, dividend and other investment income deductions – Examples include interest, account fees, investing magazines and subscriptions, internet access, depreciation on your computer.
Self-education expenses – Providing the study relates to your current job, you can claim expenses like course fees, student union fees, textbooks, stationery, internet, home office expenses, professional journals and some travel.
Tools, equipment and other equipment – If you buy tools or equipment to help earn your income, you can claim a deduction for some or all of the cost. Examples include protective gear, including sunscreen, sunglasses and hats if you work outside, office equipment, safety equipment and technical instruments.
Other deductions – other items you can claim include union fees, the cost of managing tax affairs, income protection insurance (not if it’s through super), overtime meals, personal super contributions and other expenses incurred in the course of earning an income.
If you own an investment property you can claim expenses relating to the property but only for the period your property was rented or available for rent. Expenses could include:
Management Related Expenses – advertising for tenants, property agent fees and commissions, travel undertaken to inspect or maintain the property or to collect the rent, phone, stationery and postage used in managing the property.
Maintenance and Repairs – including gardening and lawn mowing, cleaning, pest control and other general repairs like plumbing, electrical, etc.
Bank Related – interest expenses, bank charges like account keeping fees, discharge.
Ownership Related – body corporate fees and charges, council rates and land tax, insurance – building, contents and public liability, legal expenses (excluding acquisition costs and borrowing costs), water charges.
Capital works/Decline in value of depreciating assets – the use of a Quantitative Surveyor is recommended here. They will help attribute cost to wear and tear of your property which can provide a significant advantage at tax time.