20 May 2009

Top 7 Tax Return Tips

1. Find yourself a good tax accountant/agent.

A good tax accountant is worth their weight in gold. They are responsible for knowing all the deductions that you are entitled to – things that your annual Tax Pack may not list.

2. Keep your receipts throughout the year – for EVERYTHING!

Then let your tax accountant decide what is relevant and what is not.

3. Keep your receipts organised.

If you don’t have access to a specific tax tracking software package, ask your accountant exactly what they need from you and set up a spreadsheet to track the information. It’s a small step up from the shoe box!

4. Do you earn more than $50,000 pa?

If you don’t have health insurance, you may get slugged with another 1% Medicare surcharge. This may cost you more than having a health care package! So why not have the healthcare – and more money in your pocket? Talk to your accountant/agent to check your personal situation.

5. Remember to declare all of the interest you earn.

Financial institutions have to supply this information to the Tax Man – so be up front!

6. If you are earning interest on savings, have a look at your debt situation first.

You won’t be earning a great deal of interest on your savings at the moment, so it could make a lot more sense to pay outstanding debts instead as they will be accruing a higher interest amount. You may also consider placing your savings in an offset account against your mortgage. This way the interest on your mortgage is calculated on the loan size less the offset balance. It’s like earning interest but without paying the taxes on it.

7. Do you know that the costs associated with having a tax agent are deductable?

This includes the costs of getting to and from their office plus any calls or correspondence with them.

(Told you they’re worth their weight in gold!!!)

Older and Wiser

Your tax agent should also keep you advised of tax categories that you may not be aware of!

Do you think you qualify for the “older and wiser” category? Ask your accountant about the mature age worker offset. (The offset reduces the tax owing, not the taxable income.) To be eligible for the mature age worker tax offset you must be aged 55 or over at the end of the financial year, be an Australian resident for tax purposes and have earned a net income (from working) between $10,000 and $53,000. The maximum offset you may receive is $500.

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