7 Daily Hacks to Better Tax Refunds – Day 5 (Income Protection)

By Stephen Burns, CEO Mr Tax Refund.

If you’re single and earning over $90,000 or over $180,000 as a couple you will be charged the Medicare Levy Surcharge if you don’t have private health insurance. The surcharge can be over $1,000 a year (2% compulsory Medicare Levy plus 1% extra Surcharge).

Instead of paying this money, you could invest in private health insurance. Some health insurance policies cost less than $1,000 per year and this way you know you are privately covered for any unexpected medical issues.

 

If you are earning under $90,000 as a single or under $180,000 as a couple then the Medicare Levy Surcharge does not apply to you.

Check your Medicare Levy Surcharge rate with the Private Health Insurance Rebate Calculator.

Income Protection Insurance

We constantly hold ourselves accountable to provide for our families and to plan for the unexpected. No matter how hard we try to keep on track by staying out of harm’s way and being healthy there are too many things we can’t control and risks we can’t avoid.

Income Protection Insurance provides you and your family with an income if you get sick or injured. It’s also tax deductible so should put more cash back in your pocket around tax time.

Your tax consultant will be able to help you claim the cost of the premiums you pay against the loss of your income.

×       You can’t claim life insurance, trauma insurance or critical care insurance premiums.

There are a few more things you should know about what you can’t claim on your Income Protection Insurance so it’s best to speak to a professional tax consultant.

Want more tips? Check out out our whole Ebook here.

7 Daily Hacks to Better Tax Refunds – Day 4 (Donate!)

By Stephen Burns, CEO Mr Tax Refund.

If you are passionate about a charity or cause, then the best thing you can do is support them by donating! You automatically feel good from contributing and another great part is that if it is a registered charity, you may be able to claim some of the donation as a tax deduction.

As a general rule, most medical foundations and overseas aid charities are registered, while most churches and building funds are not. Otherwise you can:

  • Ask the Charity directly – they will be able to tell you
  • Check online; visit ACNC (Australian Charities and Not-for-profits Commission)

The ACNC website has information about over 54,000 charities.

Every donation over $2 to a registered charity is tax deductible and you don’t need a receipt if it’s below $10. If the donation exceeds $10 it’s best to ask for a receipt. If a tax consultant is completing your tax return, you can tell them about which charities you donate to and they can handle it from there.

What you can’t claim.

×       Charity membership fees

×       Raffle tickets

×       Any expenses incurred from attending a charity event

×       Donations to a non-registered charity

×       A donation that results in your getting something of value in return

For a full list of what you can’t claim just contact us.

Want more tips? Check out out our whole Ebook here.

7 Daily Hacks to Better Tax Refunds – Day 3 (Use a Logbook)

By Stephen Burns, CEO Mr Tax Refund.

Do you use your car for work-related purposes?

If you use your car for any work purposes e.g. driving between jobs or locations, you may be able to claim the appropriate expenses as a deduction.

Most people use the cents-per-km method which does not require a logbook. Under this method this tax year you can claim a maximum of 5000km at 66c per km.

You do not need written evidence to show how many kilometres you have travelled, but the tax office may ask you to show how you worked out the kilometres claimed.

If you travel over 5000 km for work purposes (an average of about 96 km a week) then the car logbook method will likely give you a better refund – especially if you have a medium to large vehicle.

  • You need to keep a logbook for 12 weeks in a row.
  • The 12-week logbook covers you for 5 years of claims.
  • It must include all work-related trips and personal trips.
  • Your claim is based on your proportion of business use. That’s the percentage of kilometres you travel in your car for business.

The ATO have created a MyDeductions App that you can download and use throughout the financial year. This means you can log your work-related car trips electronically from your phone! There are also lots of third party Logbook Apps where you can log your travel on your phone using GPS data, and then email that report to yourself or straight to your accountant.

You may prefer to manually write down your work-related trips so we’ve made it easier for you by providing a FREE downloadable log book here. Just print out as many pages as you need.

Want more tips? Check out out our whole Ebook here.

 

7 Daily Hacks to Better Tax Refunds – Day 2 (EOFY Sales!)

By Stephen Burns CEO Mr Tax Refund.

Tax Time is 7 days away. In an effort to reduce the tax season headache we thought we’d give you some daily short hacks as a countdown to tax refund time.

Hack 2: See if you’ll benefit from the End-of-Financial-Year sales

Ever wonder why companies like Officeworks have end-of-financial-year sales in June? It’s because they know that people ‘stock up’ on stationery and supplies just before June 30 to claim the expense straightaway.

If you’ve had a pay rise during the year, you might have bumped up to a higher tax bracket. A tax bracket is the amount of tax you pay according to your income. The aim would be to claim as many deductions as possible to ensure you drop down into the lower tax bracket, so jumping into the end-of-financial-year sales is a massive YES.

Work out which tax bracket you fall into from the tax table below. This will determine whether or not you should buy or delay before the end of the financial year.

Tax Rates 2015-16 Source: ATO

If your income is higher or the same as last year, you might be better off buying tax deductible supplies as it could move you down into a lower tax bracket.

If your income (and tax) is lower this year and you expect it to increase next year then it’s better to hold off until next year.

It’s important to speak to a tax consultant about which tax bracket you fall into for the year and the effects of purchasing supplies or stationery in the end-of-financial-year sales.

7 Daily Hacks to Better Tax Refunds – Day 1.

By Stephen Burns. CEO Mr Tax Refund.

There are only a few times every year that we get excited about money. A part from opening birthday cards and grabbing a bargain at the Boxing Day sales, the biggest cash time for most of us is during Tax Season.

We are among the highest taxed individuals in the world; in fact, the top marginal tax rate in Australia is now 47%. If you are earning between $37,001 – $80,000 you could be paying up to 32.5%. That’s just under a THIRD of your annual salary.

This is why it’s important to make sure that you’re not paying any more tax than you have to and that you understand what tax deductions are available to you.

Tax Time is 7 days away. In an effort to reduce the tax season headache we thought we’d give you some daily short hacks as a countdown to tax refund time.

HACK 1: Keep ALL Your Receipts

This is our number 1 tip when it comes to maximising your tax refund and minimising the amount of tax you pay. Keep all of your receipts because you never know what you might be able to claim with the help from a tax consultant!

Receipts = Tax Deductions = More $$ Tax Refund

BASIC RULES ABOUT DEDUCTIONS.

You can only claim deductions for work related expenses. If you’re an Administrative Assistant you can’t claim sunglasses and sunscreen, but if you’re a Roof Tiler you can.

You can only claim deductions incurred while performing your jobIf you are a Warehouse Worker completing a paid training course to become a Chef you can’t claim that deduction. You’ll have to wait until you become a Chef to claim.

You can claim an expense if it’s used for both work and personal use. If you use your mobile phone or internet for both personal and work reasons, you can still claim what you use for work (so keep the bill or receipts!)

Deductions aren’t added to your tax refund, dollar for dollar. They’re taken from your taxable income, which means you get a proportion back depending on your income and taxation bracket.

Whether your receipt is for $2 or $2,000 it can quickly add up over the financial year.

HOW TO STORE YOUR RECEIPTS ELECTRONICALLY

You can store your receipts electronically by downloading the MyDeductions App from the ATO. Alternatively, you can store them on your phone or computer by taking a clear photograph or scanning them.

HOW TO STORE YOUR RECEIPTS MANUALLY

Just pop your receipts in your bag, wallet or purse. From here you can toss them into a folder every couple of days. If you want to write notes on the receipts make sure you don’t use a highlighter as it can fade the ink.

After you submit your Tax Return, make sure you keep the receipts for at least 5 years. This is so you can prove your claims if the ATO asks for them.

Stay tuned for Daily Hack 2 tomorrow or if you want all 7 now download our FREE EBOOK.