Tax deduction tips to follow now if you want a richer refund

Whether you’re an employee or self-employed, acting before June 30 can deliver a financial windfall within months. Here’s how.

Tax season is almost here and people chasing the biggest possible refund have just over two weeks to make their move.

There is a pile of personal deductions available to potentially claim thousands of dollars back from the Australian Taxation Office.

And superannuation fund members have their own deductions that can turbocharge any tax refund – sometimes by tens of thousands of dollars.

The next two weeks are more important than usual when it comes to timing tax deductions, says chartered accountant and Mr Taxman founder Adrian Raftery, because tax rates drop for everyone from July 1.

“You will get more bang for your buck in this year’s tax return if you bring forward deductions, Dr Raftery said.

Platinum Accounting Australia managing partner Coco Hou said late June provided a “last chance to check and claim all eligible deductions and rebates specific to Australian tax laws, such as work-related expenses, charitable donations, and superannuation contributions”.

Platinum Accounting Australia managing partner Coco Hou. Picture: Toby Zerna

Beyond Bank chief customer officer Nick May said there was still time to get organised.

“Put a couple of hours aside and, even if it is all in a shoebox, go through it and add it up,” Mr May said.

These 10 tax tips can help individuals turbocharge their 2024 tax refund.

1 FREE ATO GUIDES

Any worker wanting bigger deductions should examine the occupation and industry specific guides available on ato.gov.au.

They cover about 40 sectors including retail, real estate, truck drivers, travel agents, nurses and cleaners, and contain information about deductions you may not know you can claim.

2 BE WORK-WISE

Even if there’s no ATO guide for your job, think about the work-related expenses you have incurred this financial year – including laundry costs for washing work uniforms, technology spending and travel to meetings.

“Depending on your job, you could be eligible to claim several expenses related to your work – your phone, computer and home office costs, it all adds up,” Mr May said.

“Remember, you will need a record of these expenses and you can’t claim on money that has already been reimbursed to you by your employer,” he said.

3 DONATE FOR DEDUCTIONS

Donations to legitimate charities are tax-deductible and many people use the end-of-financial-year to spread generosity.

“June is a good month to give money to your favourite cause as this will be tax deductible,” Mr May said.

“Giving makes us feel good, so even a small amount will make a big difference.”

4 PREPAY EXPENSES

Ms Hou said deductible expenses such as professional subscriptions and investment loan interest also could be paid before June 30 to bring forward tax deductions.

Union fees, travel bookings, conference costs and education expenses are among other work-related expenses that can be prepaid before June 30 to bring forward the deduction.

5 DRIVE BIGGER CAR CLAIMS

Dr Raftery said people who used their car for work-related travel could claim “deductions in the thousands” if they used a logbook for at least 12 weeks.

“Make sure that you keep all costs associated with the running of your car – such as petrol, insurance, registration, servicing and lease payments – for the whole year, not just the period that you kept the logbook,” he said. Travel between home and work is not tax-deductible.

6 SUPER SAVINGS

Big tax deductions are available to people who pump extra money into their superannuation.

Everyone has as an annual cap for tax-deductible super contributions, known as concessional contributions, and it includes employers’ compulsory payments and salary sacrifice.

“It’s a really good safe tax deduction,” Dr Raftery said. “It’s your money – you have control of how you invest your superannuation.”

Ursula Lepporoli from KPMG. Picture: Supplied

Nick May from Beyond Bank Australia. Picture: Supplied

7 CATCH-UP CONTRIBUTIONS

In recent years people have been allowed to make extra concessional contributions if they have unused space in previous years’ caps. These are available for people with super balances below $500,000.

Dr Raftery said people who had a windfall gain, such as from selling an investment, could use super tax deductions to wipe out capital gains tax.

“The carried forward super could be as much as $130,000 depending on how much money you have put into super over the years,” he said.

8 WORKING FROM HOME?

Tax deductions for working from home may be lucrative but the rules changed last year. You can still claim deduction based on hours worked, at 67c per hour, but this now includes phone, internet and stationery that could previously be claimed separately.

KPMG tax partner Ursula Lepporoli said the alternative was the “self-explanatory ‘actual cost’ method, which is more onerous in terms of calculations and record-keeping, but may provide a more favourable outcome for the taxpayer”.

9 INSURANCE CLAIM

If you pay income protection insurance premiums outside of your super fund, consider paying them upfront because – unlike all other life insurance premiums – they are tax-deductible.

10 GET HELP

A good tax agent or accountant can work wonders. They will help people delay their lodgement until May, spot every possible deduction, and are tax-deductible.

“You can claim a deduction for tax agent fees in the year that the fees are paid,” Ms Lepporoli said.

Business partners Laura Edmunds and Fillippo Ludovici. Picture: Tom Huntley

Tax cuts, personal deductions a double winner

Tax deductions for personal spending are a focus for Laura Edmunds even though she’s also busy running a business.

The part owner of cafe-restaurant Hello Neighbour is also looking forward to the July 1 stage three cuts.

“It’s a great relief from the constantly rising of cost-of-living pressures,” Ms Edmunds said of the stage three cuts, which deliver a workers on an average wage $177 extra each month.

Personal tax deductions for superannuation, donations and some insurances are also something she considers.

“It’s a great way to bring money back into the consumer pocket or to invest in future savings.”

However, embarking on a pile of tax-deductible spending on her business is not something Ms Edmunds does each June.

“June being such a busy time financially, it’s not prime for us to make big business decisions,” she said.

Originally published as Tax deduction tips to follow now if you want a richer refund