Preparing for your 2019 Tax Return

Tips for tax minimisation

1 – Claiming work related expenses

Claiming work expenses will help with tax minimisation, however it is extremely important to claim the correct items. The claiming of an incorrect item may result in a penalty from the ATO.

Depending on your industry here are a few items that you may be eligible to claim:

• Tool and work related clothing – these are items that are required to complete your job
• Safety items – all items related to OHS, from protective gear, through to sunscreen and sunglasses
• Technological items used for work – such as computers and phones that are needed for the running of your day to day business
• Courses and conferences – that can help in regard to professional development or pay rise

2 – Claiming your home office

If you work from home full time, part time or on occasion you can claim this as a tax deduction. Items that are included in this are:

• Cleaning costs
• Furniture
• Phone bill
• A portion of your internet
• A portion of your electricity bill

If you operate solely from home with a dedicated work space, you may even be eligible for a portion of your rent, home insurance or mortgage! The portions must be calculated correctly however, so working with your tax agent is important for deducting the correct amounts.

3 – Keeping a record

Tax-payers in Australia are responsible for keeping a record of all taxable income and deductions. This means you must have a record of all payments received, expenses claimed, assets and tax deductions for five years from the date you lodge your tax return. This includes either paper or digital copies, which are clear and legible. Using tax software (see tip below) can help with the maintenance of such records.

4 – Accounting software

There are number of tax softwares a business can use – commonly used are Xero and MYOB. Each software has it’s own level of capability so whether you are a sole trader or corporation, it is important to consider which may be useful for you. Features you may want to look out for are – bank reconciliation, BAS lodgement, single touch payroll, and general records of income and expenses. Your accountant may help you decide which is the best for your business.

5 – Using a tax agent

There are many nuances and facets of tax that means someone without the correct level of knowledge could lodge not enough or the wrong information. Using the right tax agent means that your lodgement will be accurate and can maximise the amount on your return. Other benefits can include:

• Claiming the tax agent as a deduction
• Claim more of and the the correct deductions
• Assistance with calculations for which portion of expenses can be claimed
• And offer other tax tips and advice