Winter is upon us and now is your final chance to take advantage of any last minute strategies to reduce your tax before June 30. Whether you plan to use an agent to complete your return or do it yourself, it’s vital that you claim deductions for everything that you’re entitled to.
There are a number of strategies to claim more of what you’re entitled to at tax time. The first step is understanding what is tax deductible and what is not. To help out, we have put together five of the most commonly overlooked tax deductions.
1. Professional memberships and subscriptions
If you’re a member of a professional or trade association as part of your work, you can claim a deduction for the amount you pay in subscriptions. This also covers union fees if you’re a member of a trade union, as well as subscriptions to trade or professional magazines or – if you’re an investor – subscriptions to publications like Money magazine.
Don’t forget, if you prepay your fees or subscriptions for next year before June 30, you can claim a deduction this year, which can be a useful timing benefit.
2. Rental property expenses
Most people with a rental property know that you can claim a deduction for the interest element of the mortgage but there are plenty of other deductions you can claim, many of which are often forgotten. So, if you’ve paid out for any of these costs this year, make sure you claim a deduction:
- Gardening and lawn mowing
- Bank fees
- Pest control
- Security patrol fees
- Bookkeeping/secretarial Fees
- Travel expenses to inspect the property
- Maintenance and repairs
- End of lease cleaning costs
- Letting agent fees, including marketing
3. Tax affairs
If you paid for a tax professional to complete last year’s tax return, you can claim a deduction for the cost in this year’s return. Better still, you can also claim a deduction for any travel costs you incurred getting to and from your agent. If you’ve paid for any tax advice during the year, that too is deductible.
4. Income protection insurance
If you pay for insurance premiums against loss of income, those amounts are tax deductible. But be careful; that doesn’t include life insurance, critical care insurance or trauma insurance. It also excludes policies paid for out of your superannuation contributions.
5. Mobile phone and home internet expenses
If you use your personal mobile phone for work – either to make or receive calls – you can claim the cost of these calls as a deduction. You can only claim business-related calls so in order to work out the split between business and personal use, keep a diary for at least four weeks in order to work out the business use proportion. For example, if you have a $100 monthly mobile phone plan and you determine – based on your diary – that 25% of your calls are work related, you can claim a deduction for $25 per month, or $300 per year.
Similarly, if you use your home internet service to deal with work related matters, such as responding to work emails, you can also claim a proportion of those costs. Remember, keep a diary!
We’ve seen many changes this financial year with the Federal Budget announcements and changes to tax time sanctions.
If you would like to talk to us about anything discussed in this email please do not hesitate to contact Gary Jones on 0407 047 917 or Stephen Wait on 0438 227 811.
After all, we’re here to help!