It’s that time again.
As much as we all love to complain, there’s something about tax time that is at least a little thrilling. The chance of saving some money is always too good to pass up.
As always, SmartCompany has got you covered. We’ve compiled a panel of tax experts to give us their best tips on how to minimise your tax bill this year. There isn’t much time left – so you’d better get started:
1. Superannuation contributions
Superannuation is one of those areas you don’t want to get wrong. If you pay too much, you’ll incur the wrath of the Tax Office and pay an extremely high rate of tax.
This year, all individuals have a concessional contribution cap of $25,000. Anyone over 50 enjoyed a higher contributions cap until June 2012, but that is no longer in effect – everyone’s contributions are capped at $25,000.
Thankfully, the government has announced some changes regarding the contributions cap for older Australians and excess contributions. But those won’t apply until next year.
2. Claim those deductions if you can
Entrepreneurs and individuals will no doubt be claiming deductions left and right, but as DBA Lawyers director Dan Butler explains, you want to maximise the amount of deductions you can claim.
Any possibility where you can bring forward a deduction should be exploited. If you’re thinking of paying for some equipment eventually, it might be a good time to do that now.
“The law requires you to have incurred the expense,” he says. “But as long as you have rendered yourself subject to a liability, you should be able to claim deductions.”
This means you may not necessarily have had to hand over money for an expense. As long as you’re subject to that financial liability, the deduction can be claimed.
3. Defer income
The opposite rule also applies – you’ll want to defer income as much as possible. As Dun Butler explains, that can range from anything as small as a business expense to a property sale.
“If you want to sell a rental property, it’s worth waiting until the next financial year. You’ll only pay the tax in the year the return is lodged.”
4. Home office supplies
Do you operate a home office? Deduct any item you can, including stationery, supplies, software, equipment and even a library.
Don’t forget you can also deduct larger pieces of equipment like a computer, but as it’s a capital expense you won’t be able to deduct the entire cost at once. You’ll need to deduct the depreciation – you can find out more about that on the ATO website.
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