JohnHopkins

How To Get a Bigger Tax Refund

by Financial Review_13th June, 2010

Income

• Start salary sacrificing into super
• Delay any bonus or eligible termination payment to July 1 when the final tax cuts kick in
• If taking leave this month don’t ask for payment in advance, it’ll be taxed at this years higher rate
• Salary package a laptop – if used for work its FBT free
• If you have a company car and earn less than $180,000 switch to the employee contribution formula
• Low rate taxpayers should check whether any fringe benefits they’re getting are still worthwhile
• First home buyers should start a first home saver account and collect a tax break as well as government grant (separate from the first home buyers one)

Deductions

• Start a diary of expenses if you want to claim for taking work home
• Prepay next year’s interest on investment loans income protection insurance
• Donate to a registered charity
• Pay professional subscriptions and union fees upfront
• Bring forward medical, dental and other check-ups and get prescriptions filled by June 30. The threshold for the medical expenses rebate raises $500 on July 1
• Keep receipts for school expenses (such as textbooks and laptop) if you’re eligible for Family Benefits Part A, as any excess can be carried forward and qualifies for a 50 per cent deduction
• Bring forward self-education and work-related expenses such as tools of trade
• Keep receipts or your credit card statement for one-off expenses such as computer repairs, virus software and the like
• Join a private health fund; under new rules for Medicare surcharge kicks in at $73,000 for singles and $140,000 for the combined income of a couple and counts salary sacrificed into super

Investments

• Take advantage of the weak share market to move assets within your family or into a DIY super fund
• Choose term deposits that mature after July 1 next year when the 50 per cent tax discount on the first $1000 of interest kicks in
• Put savings and other interest-bearing accounts in the name of the lowest taxpaying family member or in join names
• Look at fully franked dividend-paying shares (and put them in the name of the lowest income earner)
• Get a quantity surveyor to value your investment property so you can claim maximum depreciation
• If buying an investment property consider living in it for up to six years, which will save capital gains tax
• If selling an investment property delay settlement to July 1, thus postponing capital gains tax for a year

Small Business Breaks

• Review you use of private company assets as benefits are now taxed at market value
• Duct losses from running a side business if your taxable income is less than $250,000
• Make sure new equipment or furnishings ordered by December 31 are installed by June 30 for the 30 per cent deduction.
• Write off any bad debts out of the ledger so you can claim a deduction
• Write down stocks if the replacement cost has dropped below the book value.

 

This article appeared in the Financial Review - 13th June, 2010 

 

 For more information, or to arrange an appointment with a John Hopkins Financial Adviser or Taxation Accountant, please contact our Client Liaison Officer on 1300 726 082 or click here.