It’s two weeks to tax time, so act now to put money in your pocket

TAX time is less than a fortnight away, leaving millions of Australians just days to decide whether they want to beef up this year’s tax refund.

TAX time is less than a fortnight away, leaving millions of Australians a short time to decide whether they want to beef up this year’s tax refund.

The end of the financial year draws a line in the sand for tax deductions, and financial specialists say that smart spending in late June can deliver a cash windfall between July and September — rather than having to wait an extra year to get your money.

Each year more than 10 million Australians receive a tax refund, averaging more than $2500. Whether you’re a worker, super fund member, investor or business owner, here are some potential ways to make yours bigger.

1. LEARN YOUR DEDUCTIONS

Many employees miss out because they do not realise what deductions they can claim.

Work-related items bought before June 30 can become a quick deduction, and the Australian Taxation Office publishes guides for specific occupations. It has almost 40 different guides — from nurses and cleaners to adult industry workers and lawyers — so find one that matches or is close to your job.

2. TECH TIME

More Australians are bringing work home and using technology, opening the door for tax deductions for items such as phones and internet use.

NDA Law managing director Andrea Michaels said apps, USB sticks and cloud storage could be deductions for some workers.

3. CLOTHES MAKETH THE MONEY

If you need to upgrade your work uniform, do it now, but be aware that the ATO has strict rules about what clothing is considered a uniform and the size of the business logos that must be on it. Black pants and a white shirt are not considered a uniform.

NDA Laws’s Andrea Michaels says technology costs can be tax-deductible. Picture: Mike Burton

4. GIVING GENEROUSLY

Donations over $2 to recognised charities are tax deductible, so being generous in late June can pay off. H & R Block director of tax communications Mark Chapman said you should make sure your money was going to a charity registered as a deductible gift recipient, and this could be checked at www.abr.business.gov.au.

5. MEMBERSHIP BENEFITS

“If you pay any fees to a professional association or pay trade union fees, if you pay that in June you can get the tax deduction now,” Mr Chapman said.

6. READING FOR A REFUND

Similarly, subscriptions to trade journals or other publications related to your work are tax deductible, so consider paying for a year’s worth in advance.

RELATED: The tax errors you should avoid

7. REV UP CAR COSTS

If you use your car for work and claim deductions using the logbook method, think about getting some maintenance or repairs done quickly. If not using a logbook, car costs can be claimed at 66c per kilometre if work-related travel is up to 5000km a year and you can prove your usage. You cannot claim travelling to and from work as a tax deduction.

8. UPFRONT INSURANCE

Income protection insurance is tax-deductible and you are able to prepay next year’s premium and bring forward its tax deduction. Other forms of life insurance, including cover held in super, are not tax-deductible for individuals.

9. SUNSCREEN IN WINTER?

If you work outside you can claim the cost of sunscreen as a tax deduction, so stocking up now might be a good strategy. Deakin University associate professor Adrian Raftery said many Australians “never think about it at this time of year”.

People who don’t understand what they can claim at tax time may miss out on free money.

10. SUPER STRATEGIES …

Superannuation rule changes on July 1 mean the caps on making contributions are dropping, so this is the last chance for many to make bigger deposits into super — potentially giving them a tax deduction or at least boosting their retirement nest egg.

11. … BUT DON’T JUMP THE GUN

ATO assistant commissioner Kath Anderson said some changes — such as any worker being able to make tax-deductible super contributions at any time — would not start until 2017-18. “Be aware of the fact that you can’t claim these sorts of things this year — people often get confused about different years,” she said.

12. SUPER FOR YOUR SPOUSE

People with spouses earning below $13,800 this financial year can get a tax rebate of up to $540 if they contribute to their spouse’s super fund before June 30. This $13,800 threshold triples to $40,000 from July 1, widening the chance for free money.

13. EDUCATION EXPENSES

If you’re planning to enrol in a further education course related to your current employment, consider paying for it now. The ATO generally allows you to claim all but $250 of these costs.

14. GAINS AND LOSSES

Investors who have sold assets for profit this financial year may face a capital-gains tax bill. They can offset that bill and potentially boost their refund by selling loss-making investments before June 30 to offset the gain.

15. PREPAY INTEREST

Investment loan interest can be prepaid before the end of June to bring forward a year’s worth of tax deductions. This can be added to the interest already paid this financial year.

16. PAYING FOR PROPERTY

Rental properties in need of some repairs and maintenance offer a chance for their owners to spend quickly and get their tax deduction quickly too. Landlord insurance is another common real estate investment item that can be prepaid before June 30.

17. DEPRECIATION DEDUCTIONS

Depreciating the value of carpets, curtains and other fittings is a handy tax deduction but it won’t be available to second-hand properties and purchases after June 30. “The government tightened it in the last Budget, but it’s still available,” Ms Michaels said. She said while a depreciation report could be ordered at any time of the year, the report itself was tax-deductible so paying for it in late June made good financial sense.

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Deakin University’s Adrian Raftery says sunscreen deductions can be forgotten. Picture: Jason Edwards

18. DELAY INCOME

One way to boost a refund is to delay or bring forward income depending on your situation. For example, high income earners — on $180,000 a year or more — get an effective 2 per cent tax cut from July, so delaying bonuses, invoices or other income until then means more money in their pocket.

19. BUSINESS BONUSES

Small business owners and self-employed people get huge tax incentives by being able to claim an instant deduction for every individual business item they buy below $20,000. Small car? No worries. New equipment? No problems. Last month’s Budget extended this generous incentive until at least the next financial year.

20. GET SOME HELP

ATO figures show that last year 3.2 million people filed their tax returns personally online while 9.1 million used a tax agent. If you’re unsure about deductions or strategies, seek advice, and the fees you pay for it will be tax deductible.