As the end of the financial year (EOFY) approaches, it’s the perfect opportunity to explore strategies to maximise your tax refund. Starting your planning early can make a significant difference, so let’s explore some options that will help you get a great result this tax time.
Tips for maximising your tax return
1. Get to know your deductible expenses
First things first, let’s talk deductions. It’s crucial to understand what you can claim, from work-related expenses such as uniforms and home office costs to charitable donations and the costs involved in managing your taxes. Keeping good records throughout the year, including all receipts and logs, is key to making this process smoother and more beneficial. It’s worth researching what expenses you can deduct and start collecting your receipts now so that the process is smooth sailing during tax time.
2. Consider prepaying expenses
A smart move, if you have some spare cash, is to prepay some of your deductible expenses. This can include professional memberships, subscriptions, or even interest on investment loans. By doing this, you can claim these expenses in the current tax year, effectively increasing your deductions and lowering your taxable income right away.
3. Boost your super and save on tax
One of the most effective strategies for both reducing your taxable income and building your retirement savings is making voluntary contributions to your superannuation. For the 2023-2024 financial year, the cap on concessional (pre-tax) contributions is $27,500, which includes both your employer’s contributions and any amounts you choose to sacrifice from your salary. The best part about this strategy is that your savings are directed to your future self, rather than being spent elsewhere.
4. Reassess your investment portfolio
The EOFY is also a great opportunity to review your investment portfolio. If there are any underperforming investments, consider whether it might be time to sell them and realise a capital loss, which can offset any capital gains. If you are going down this path, always consult a financial advisor to make sure that this strategy fits within your broader investment goals and doesn’t lead to unintended tax consequences.
5. Don’t forget home office deductions
If you’re working remotely, make sure to claim home office deductions. You can deduct a portion of your electricity, internet costs, and even depreciation of office equipment. The Australian Taxation Office (ATO) offers a simplified method for calculating these deductions, so exploring the best option for you could result in nice savings.
6. Consult a tax professional
Tax rules can be complex and vary widely depending on individual circumstances. For peace of mind and to ensure you’re making the most of your tax return, consider consulting a tax professional. Bespoke advice can help you uncover deductions you might not have considered.
Tax time doesn’t have to be stressful
Getting ready for EOFY doesn’t have to be stressful. Small moves such as familiarising yourself with your entitlements, and considering strategies like prepaying expenses and contributing to your super, will set you up for success in time for tax time.
If you are still feeling overwhelmed, working with a tax professional is the best way to ease the burden. You’ll be in safe hands knowing that you are doing all of the right things to maximise your tax refund effectively.
Written by APS Senior Accountant, Stephen Fry.
Stephen is an accountant with over 13 years of professional expertise in the areas of taxation and accounting. Currently serving as a senior tax accountant at APS Tax, Stephen offers comprehensive guidance and ensures compliance in all tax-related matters. He has developed a specialised focus in areas such as self-managed superannuation funds, cryptocurrency taxation and leveraging software and technology to assist clients in streamlining their processes. Beyond his professional pursuits, Stephen cherishes quality time with his family and enjoys unwinding on the golf course. On the weekends he also enjoys following the AFL and watching British comedy television.