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How to maximise your tax refund
You’re required to pay taxes annually if you’re an Australian resident for tax purposes, and the only way to avoid this is if your income is below the tax-free threshold.
How to maximise your tax refund
You’re required to pay taxes annually if you’re an Australian resident for tax purposes, and the only way to avoid this is if your income is below the tax-free threshold.
Tax bills can run high, but careful tax planning helps you minimise your tax payable and may entitle you to a tax refund.
Here are some ways to increase your tax refund:
Maximise super contributions
Concessional and non-concessional superannuation contributions and spouse contributions are deductible as long as they fall within the contributions cap.
Placing your extra income in super will allow you to remove the contributed amount from your assessable income while also growing your retirement nest egg.
Incorporate investment strategies
All income from investments form part of your assessable income, so it is advisable to select tax-effective asset for your portfolio.
Likewise, you may opt to execute investment strategies that aim to lower your taxes legally, such as negative gearing for investment properties.
Claim usually forgotten deductions
There are many ATO-allowed tax deductions that may be claimed. You simply have to check if you are eligible to claim them to increase your refund. Take note of the following deductions:
- Work-related expenses
You may claim a deduction on vehicle and travel expenses for work-related duties, laundry and dry cleaning expenses for specialised work-related clothing, overtime meals, tools and equipment for work use.
You may also claim deductions for work-related self-education expenses (i.e. seminar fees) that were not reimbursed by your employer. - Tax agent expenses
If you paid a tax agent to prepare and lodge your tax return for the previous tax year, you’re allowed to claim a deduction on the amount you paid in the current year’s tax return.
This deduction falls under the “Cost of Managing Tax Affairs” section of your tax return. - Donations
Any monetary or property contributions or donations may be deducted as long as it was given to accredited deductible gift recipients and was given completely voluntarily.
ATO prohibits claiming deductions if the donation provides a personal benefit to the donor in exchange for their “gift”.
Explore nestegg for more ways to be smart with your taxes.
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