Tax Tips For Individuals

If you are an individual taxpayer, you may be wondering how to save money on your taxes. Here are some tips that can help you:

1. Maximise concessional contribution cap by making deductible personal superannuation contributions.
The concessional contribution cap for the 2023 financial year is $27,500. Individuals need to satisfy a work test for the 2023 financial year if they are between 67-74 years of age.

2. Make a superannuation contribution for a low income earning spouse

Where a taxpayer makes a superannuation contribution on behalf of their low income earning spouse, the taxpayer can claim an offset of up to $540. To be eligible, the spouse must have taxable income of less than $40,000.

3. Taxpayers with superannuation balances of less than $500,000 that have not maximised their eligible contributions caps from the 2019 financial year can make catch-up concessional superannuation contributions in the 2022 financial year which will be deductible for tax purposes.

Thus, if the individual has not made contributions of $25,000 for each of the 2019, 2020, 2021 and 2022 financial years, catch up contributions can be made in 2023.

4. Claim home office expenses

For the 2023 financial year, the ATO has a prescribed shortcut method whereby taxpayers can claim a deduction for every hour they worked from home during the 2023 financial year. These rules have changed have a look at our article on the latest rules.

New work from home record keeping requirements. — Harper Group

Alternatively, to claiming the shortcut method, taxpayers can claim home office expenses based on actual expenses incurred for the year.

5. Ensure passive income such as dividends, royalties and interest are only recognised as income if the amounts were physically received by 30 June.

6. Consider deferring sale of assets that would crystallise a capital gain. If capital gains have already been crystallised in the 2023 financial year, consider selling assets that would create a capital loss that could offset capital gains

Capital gains are generally crystallised when a contract for the sale of the asset is entered into. A capital loss can offset a capital gain.

7. Ensure deductions are claimed for donations made to deductible gift recipient charities that have been made in the 2023 financial year.

8. Subject to cashflow, consider prepaying interest expenses on investments for a period of up to 12 months in advance prior to 30 June 2023

9. Claim work related car expenses using the cents per KM method or the travel logbook method.

Under the cents per KM method, taxpayers can claim up to 5,000 KM at 72 cents per KM. Under the travel logbook method, a taxpayer is required to have maintained a logbook for a period of at least 12 weeks to establish a business use percentage of car travel. The percentage of business use percentage can then be used to claim actual car expenses incurred throughout the year.

10. Determine any self-education expenses incurred throughout the year

Self-education expenses could include seminars attended or post-graduate studies that relate to improving the skillset of your current employment.

11. Claim all the deductions you are entitled to.

Deductions are expenses that you can subtract from your taxable income, such as work-related expenses, donations, and interest on loans for investments.

12. In addition to above ideas, we recommend the following.

* Keep good records of your income and expenses. You will need to provide evidence of your income and deductions when you lodge your tax return. You can use receipts, invoices, bank statements, or online tools to keep track of your finances.

* Lodge your tax return on time. The deadline for lodging your tax return is usually 31 October each year, unless you use a registered tax agent who can lodge it for you later. Lodging your tax return on time can help you avoid penalties and interest charges.

Finally seek advice if you are unsure. If you have a complex tax situation or need help with your tax return, you can calls on 9770 1547 or email harper@harper.com.au and we can help you maximise your tax refund and comply with the tax laws.

Harper Group Pty Ltd – Chartered Accountants Frankston - Ph 9770 1547

Disclaimer: All information provided in this article is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.

Please note we at Harper Group Pty Ltd are not licensed to provide financial product advice under the Corporations Act 2001 (Cth) and taxation is only one of the matters that must be considered when making a decision on a financial product, including on whether to make superannuation contributions. You should consider taking advice from the holder of an Australian financial services licence before making a decision on a financial product.