Tax rules change every year so make sure to plan ahead and save thousands when tax season comes around.
Although June 30 seems far off, it will be here sooner than you might think. You could miss tax savings worth thousands of dollars if you wait for the tax rules to change.
Here are five potential tax savings that it’s worth doing some preparation to make sure you’re entitled to for the 2011-12 financial year.
1. Telco expenses
You can deduct your bill if you use an iphone or ipad to work. You’ll need to keep a record of the calls you make or the time spent on the net for work but if you do, the savings can be significant.
$79 per month mobile phone plan
30% of calls concern 11 months in the calendar year
$79 x 30%x11 = 260.70
$49.95 Home broadband
15% of the work-related use
$49.95 x $15 = $82.42
TOTAL TAX DEDUCTION: $343
2. Work-related equipment
Learn more about the benefits that you might be eligible. Trades can claim tools. A briefcase, laptop, iPad, or camera might be required if you work as a financial analyst. You can claim a deduction for the total cost of any piece of equipment or tool you purchase for work. If it costs more than $300 you’ll have to claim its cost over time.
You buy a laptop for $1,500 on 1 october so you have it for 273 out of 366 days (it’s a leap year). A laptop has an effective life of three years so using the ‘prime cost method’ you can claim 33.3% of its cost per year:
$1,500 x 273/366 Day x 33.3% = 374
TOTAL TAX DEDUCTION: $374
3. Income protection insurance
If your coverage is not part of your super, you may be able to claim premiums as tax deductions. To claim your premiums for the current fiscal year, you can buy your policy online.
The cost of your policy will depend on your age, gender, occupation and whether or not you’re a smoker.
TOTAL TAX DEDUCTION: $650
4. Investment expenses
If you manage funds, stocks or other investment properties, you can claim most expenses related to investments.
An investment property will result in a $30,000 annual mortgage interest payment. Rates are 2400 annually Management fees for property are $1,750 Insurance costs $450 Your total expenses are $34,600. Your rental income is $350 per week or $18,200 annually. For your loss, you can deduct $16,400
TOTAL TAX DEDUCTION: $16,400
5. Costs for a home office
The work-related portion of your utility bill can be claimed for the loss of value of office furniture. Based on the work that you do in your home, you might be eligible to rent, mortgage interest, and rates.
This is equivalent to 2160 hours work if you work from home 45 hours per week or 48 weeks per year. Using the ATO’s fixed rate of 26 cents per hour for utilities, your tax deduction is $562.
Assuming your home office accounts for 15% of your property’s total floor space and you pay $600 per week in rent or other occupancy costs, you can also claim $90 per week for 48 weeks or $4,320.
TOTAL TAX DEDUCTION: $4,882.