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While the idea of doing your taxes may not excite anyone, if you set aside some quality time to get your finances in order, you can end up with some extra savings. The benefit of doing the hard work up front is that later on, you can reap the rewards and returns faster. To help you come out on top, we’ve put together five tips to help you pay less tax in 2018.
All donations to a registered charity of over $2 are tax deductible; so it’s always a good idea to give. Donating is a meaningful way to spend your hard-earned money – the fact that it’s a tax deduction is just a bonus. After you donate, you’ll get a receipt to file away, so when tax time rolls around, all you have to do is add up your charity receipts and claim away.
Remember, when you get your refund, you won’t see your donations come back to you right away; instead, the amount will come off your taxable income. The donation will bounce back to you as a percentage.
You can claim anything associated with doing your job. If the item you’ve purchased is half work-related and half personal, make sure you include the work-related part of your purchase in your tax deduction.
If you’re not certain an item is claimable, hold onto your receipt and let your H&R Block tax specialist give you clarity. So you don’t miss out on any deductions, we always recommend holding onto your receipts and then if you can’t claim it – throw them out.
If you get all your expenses in before the end of June, you can claim them in this return and reap the benefits straight away. If you make the purchase post-July, you’ll have to wait a whole year until you can claim it.
Now’s the perfect time to pause and assess how you’re managing your money. If you’ve fallen behind or become lax with your documents and receipts, there’s still time to pull it all together to make sure you maximise your refund.
Don’t rush into an investment – before you make a move, always talk to a financial planner. Every investment should give you an advantage now, as well as in the long term. There’s little purpose in saving a tiny bit of tax now if your investment goes on to lose you your initial capital.
You’ll also have to pay tax on any shares you’ve sold or investments that you’ve made money from. Keep this to a minimum by reducing your assets that are sitting at a loss. Be cautious of selling shares sitting at a loss and then purchasing them back when the tax year ticks over. The ATO is cracking down on this process, known as ‘wash sales' and is under instruction to cancel benefits falling under this category and issue penalties.
The more information you have about your tax, the better you can budget. When you’re putting together your tax plan, get advice from an expert accountant who specialises in tax. Doing your research will ensure you can max your tax, so ask your agent about deductible expenses and get clarity around what you can and can’t claim. Often, they’ll be aware of deductions you’re not.
With over 40 years as Australia’s leading taxation experts, we’ve had many happy returns. Whether you choose to lodge online or in-store, your return will be double checked by one of our tax professional to make sure you’re paying less tax in 2018.
Our H&R Block accountants are now working online. Book an appointment with an expert.