Income tax is the amount you pay for what you earn, but you can claim deductions from some of the expenses incurred in relation to your work. This is called a tax refund.
Whether it’s for an emergency fund or retirement, using a tax refund to start saving money will be beneficial.
Many Australians spend their tax refund to pay bills, go on a holiday, and buy major purchases. Others save it, which is also a great idea to get started on a savings plan. Whether it’s for an emergency fund or retirement, using a tax refund to start saving money will be beneficial.
Jumpstart your savings plan by improving your tax refund. Here are some of the things that you can do:
Keep all receipts
Bear in mind that you can only claim tax deductions with their corresponding receipts or if these are related to your work. Make it a habit of saving receipts as soon as you have them.
Many Australians waste a lot of time tracking down receipts received throughout the year that they end up losing some of them. This means missed opportunities to claim more dollars in their tax refund. Also, avoid false claims as this is illegal and there are serious consequences for you with the Australian Tax Office (ATO).
Keep a record of car and travel expenses
Make legitimate claims by having a logbook of expenses that can be claimed. These include registration and depreciation of your vehicle, insurance, and fuel, oil, and servicing costs. The initial purchase price of your vehicle as well as parking tickets and speeding fines cannot be claimed.
Every little amount counts
If you’re serious about using tax back to save money, small amounts can pile up and eventually boost your tax refund. Whether it’s only $5 or $10 from small purchases which you can get refunds on throughout the year, you can claim these as deductions at the end of the year to improve your tax back.
Seek advice from a tax adviser
Not sure what you can claim back? Sometimes having a better understanding is as simple as engaging a tax adviser for professional advice. A tax adviser will help you improve your tax refund and avoid getting into trouble with the ATO.
Use an income tax calculator
This online tool will give you an estimate of the amount of tax that you need to pay on or how much you will get back from your employment income for a particular year. Please note that it is used just to get free tax advice, to give you an idea of how much tax you need to pay. But as above always engage the help of a professional. They have training and expertise to help you!
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