Income tax returns are due on Monday. Here are seven ways I minimise my tax

Forget footy finals. My favourite weekend of the year is this one: the one before annual income tax returns are due and it’s GAME ON to minimise your tax bill.

Because October 31 falls on a weekend this year, the Australian Taxation Office (ATO) isn’t expecting returns until Monday – so it's not too late.

Illustration: Dionne GainCredit:

If you still can’t get it done by then, don’t worry. You can call a registered tax agent and arrange for them to lodge your return this year, in which case you’ll get an extension until March 31 next year.

However, I refuse to use a tax agent to lodge my taxes. Not only do I enjoy the sport of doing it myself, it’s a matter of principle.

If a numbers nerd like me can’t navigate the system, the whole thing is broken and I’ll take no part in it.

Admittedly, I did use an accountant a few years ago and she unearthed some sneaky ways to save. So, I just pinched those ideas and do it myself now.

Yes, tax agent fees are tax-deductible but that doesn’t mean they are free. Tax deductibility just reduces the cost of something by whatever marginal tax rate you would have otherwise paid on that money. You still incur a cost.

Before I sit down to do my tax return each year, I like to remind myself that I’m happy to pay tax.

Taxes are a ticket to democracy – the price of admission to a society that looks after the needy and provides public services we all enjoy. But nor do I want to be the mug who doesn’t claim deductions to which I am legally entitled.

More than 8.8 million Australian workers claimed almost $22 billion in work-related expense deductions in 2016-17, according to the ATO. That’s an average claim of $2486.

Refunds are also influenced by the number of tax deductions you are claiming.Credit: Virginia Star

The golden triad of rules for claiming work-related expenses is that they must: 1) have been legitimately incurred in the process of earning your income, 2) you must have incurred the cost yourself (ie not had it paid for by your employer) and 3) you must have a record of it, a receipt or bank statement.

So, at the risk of an ATO audit of my tax affairs, here are seven ways I minimised my tax this year.

1. Claim the cost of union fees

Yep, it’s entirely legit to claim the entire cost of all union fees you have paid during the financial year. Get on it, comrades.

2. Claim the cost of a handbag

Hello ladies. If you require a bag to carry the tools of your trade – be it a laptop or a tablet – you are entitled to claim the cost of that bag. Men call them briefcases. The ATO has no official position on the fashionable nature of your tote, only that it must be sufficient to carry your tools. No clutches, then.

If your bag costs under $300, you can claim the full cost in year one. If it is over $300, you must spread the cost over the reasonable life of the bag.

About seven years ago, I bought a black leather Kate Spade bag for $490 (I think we all know now why I couldn’t afford a home). My tax agent advised me to depreciate that cost over 10 years, so I am still making a $49 annual “briefcase” claim each year.

3. Claim work-related books

This year I claimed the cost of about eight books I bought and read about economics and finance, which directly related to my job. You can also claim subscriptions to journals or magazines relevant to your job.

4. Claim the cost of working from home

This is the biggie this year. In previous years, I used a complicated method to claim the work-related portion of some of my home internet and electricity costs. This year, I took advantage of the ATO's simplified method to claim 80 cents an hour for every hour spent working from home since March 1. My claim came to just over $500. Nice one.

5. Claim travel expenses

In addition to my day job as your humble correspondent, I also operate as a “sole trader”, generating a minimal amount of money doing public speaking and other commentary (I’m available for weddings and bar mitzvahs. Hit me up).

Sole traders should take care to claim expenses incurred in generating their income. My main one is claiming mileage, using the 68 cents per kilometre travelled rule.

I keep a diary of my engagements and use Google maps to calculate the distances. Salary earners can also claim the cost of any travel required by their work (but not directly reimbursed) for any travel not just between home and their usual place of work.

6. Private health insurance

Anyone who earns more than $90,000 for singles and $180,000 for families needs private health insurance hospital cover (not extras) to avoid paying the Medicare Levy Surcharge at tax time. For singles, the surcharge starts at 1 per cent and rises to 1.5 per cent for people on more than $140,000.

For me, the cost of the surcharge would be greater than the actual cost of my private health insurance, so that is a no-brainer.

7. I bought a home

Seriously, the best tax dodge ever. Before I ploughed my money into property it was sitting in a high-interest online savings account.

Every dollar in interest earned attracted tax at my full marginal rate. Now, I get to enjoy any capital gain in the value of my property TAX-FREE for the rest of my life. Ah, home sweet tax dodge. Happy tax minimising, everyone!

You can follow Jess’ money adventures and impending tax audit on Instagram at @jess_irvine_pics