2012 Tax Tips

Were you happy with last year’s tax result?? !!

Well if you’re like most of us we all would like to get the maximum refund and pay the least amount we are legally required to.

What Can You Claim?

You must have paid the expense in the year you're claiming it, so they have to be between 1 July 2011 and 30 June 2012.

The expense must be related to your work and not personal use. You can claim up to $300 of work-related expenses without receipts.

However, for claims exceeding that amount, you must produce receipts.

Remember if you were reimbursed by your employer for a work-related expense then you can't claim it in your tax return, you've already got your money back.

It's worth checking your medical expense rebate as changes have been made to the claiming limit. .

Kids Still at school:

Look at education tax refund as you may be entitled to 50% of expenses, (max $750 for primary school and $1500 for secondary school). Some deductible items are laptops/iPads, education software and textbooks but not school fees and uniforms.

Foreign Income:

A resident of Australia must declare all foreign income-but they may get a credit for overseas tax paid. if you worked overseas get payslips.

Investment Property:

Many services that relate to maintenance and upkeep of investment properties can be claimed as a tax deduction. This includes expenses such as lawn mowing, pool maintenance and certain financial advice and other professional services related to an investment property.

Superannuation:

Making a contribution to your dependant spouse's superannuation is a big way of getting a tax offset.

Self-employed people aged under 50 years can put up to $25,000 into their super fund and claim a tax deduction.

Those aged over 50 may be able to contribute up to $50,000. The money going into super is only taxed at 15 per cent rather than the person's marginal tax rate.

If your employer offers year -end bonuses you may consider salary sacrificing this into superannuation although subject to the maximum amounts applicable to your age.

Prepayment of Investment Loan Interest

Check with your bank to pre pay the next 12 months interest and make sure the bank allocates the prepayment as “interest” not principal as its the interest that is deductible not the principal portion.

Defer Income

Depending on how you derive your income it may be possible to delay the recognition of some income by say holding off the issue of invoices however consider the impact on your cash flow of this strategy.

One overriding Caution with prepayment/deferral strategy is to consider how much you expect to earn the next year. If you expect to earn more you may be taxed at a higher rate and so deferring income might not be a good strategy and deductions may be worth more in a higher tax bracket.

Capital Gains

Any capital gain cannot be deferred but must be either offset against capital losses or added to your taxable income so consider selling any assets on which you have lost money before the 30^th June. However do not just sell for tax reasons alone if the “loss” is merely temporary and really only on paper such as share investments which are subject to fluctuations.