Tax Tips To Maximise Your Return | Century 21

It’s mid-winter. This means rugging up on chilly nights, lighting the fire and diving into the paperwork to complete your annual tax return. The end of financial year (EOFY) has come and gone and you have until October 31 to lodge your return or fines may apply. If you need more time, you will need to speak with your tax advisor or accountant to obtain an extension. Following some handy tax tips can also help you maximise tax return time. 

Whether you are a homeowner or property investor, there are tax minimisation strategies you can utilise to reduce your tax burden and perhaps even receive a healthy tax refund. Here are some deductions you need to consider.

For owner-occupiers

While property investors have many more deductions they can claim at tax time, as a homeowner you have some options if you use your home to generate income. 

1. Home office expenses

If you work solely from home, and have a dedicated home office space you may be able to claim deductions for:

  • A proportion of your rent or mortgage payments
  • Home and contents insurance
  • Utility costs (gas and electricity)
  • Maintenance costs related to your home office
  • New office equipment and furnishings purchased in the last financial year
  • Depreciation on office equipment such as computers and printers
  • Work-related phone and internet costs
  • Work-related car costs and other travel costs 
  • Office sundries (printer ink, copy paper etc) 
  • Your accountant’s fees 
  • Cleaning expenses 

Even if you do some work from home over the telephone or via the internet and you have a dedicated home office you may be eligible for a proportion of these deductions. 

If you work solely from home, but don’t have a dedicated home office, the deductions you can claim reduce. So why not think about creating a home office somewhere in your home, such as a nook under the stairs or a separate studio in the garden? 

2. If you rent out a room

If you rent out a room to a boarder or for short-term accommodation for travellers, then you can claim deductions for expenses directly related to your rental income. You can claim full deductions for expenses related to the room occupied by the tenant/s and a proportion relating to common living areas the tenant/s can access. Speak to an accountant to make sure you have all the details. 

For property investors

If you have an investment property (or more than one) rented out to generate income then you can claim a slew of deductions at tax time. 

Depending on your property, these could include: interest on the mortgage, bank fees, advertising costs, property management fees, body corporate fees, essential repairs and maintenance costs, cleaning and gardening costs, asset depreciation, land tax, legal costs, landlord’s insurance and council rates and water charges. 

There are other costs, such as improvements to the property that are not essential repairs, that can’t be claimed until you sell the property and can be deducted against capital gains tax. Be sure to keep separate files for these costs.

Following the 2017 Federal Budget announcement in May, property investors will no longer be able to claim tax deductions for travel expenses to visit their property. You are able to claim these costs for the 2016/2017 financial year but not in future years. 

Where to get more help

If your tax return is at all complicated then it’s best to seek qualified advice from an accountant or registered tax advisor in order to maximise tax return time each year. The ATO (Australian Tax Office) also has a comprehensive website with a range of online tools to assist you with your tax return and work out the expenses you may be eligible to claim. You can also use the site to lodge your return online. 

Follow these tax tips, seek expert advice if needed, and a most welcome tax refund may just come your way in the near future.

Posted by Administrator on 02/08/2017 at 3:58 PM | Categories:


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