All I Want for Christmas (in July) is a Juicy Tax Refund
20/07/2016 Bobbie Adams, Senior Accountant
What do you have planned for this fine Melbourne winter’s weekend? Heading to the MCG for a game, catching a movie at the International Film Festival, a date with some dumplings in China Town, stocking up on goodies at the South Melbourne market with the family, or causing havoc on the streets catching Pokémon!?
Well there is one activity that might just, just, be more exciting, and I think you know where we are going here...It’s time to prepare your tax return! I am excited. Am I just a soulless accountant with a distorted understanding of fun? Arguable, but stick with me.
Deductions are the Pikachus of your tax return
Having beavered away for the last twelve months earning an income - whether as an employee or through business - it is time to lodge your tax return and get back some of your tax dollars if you can.
If you are expecting a refund, now is the time to collect all of those valuable deductions together to maximise the amount you will receive as a refund. Just think of the extra cash you will have (in two weeks’ time according to the ATO’s current processing time if you lodge today).
What will you do with your refund? An extra glass of gluhwein, new shoes, cheeky weekend getaway? Better still, make your financial planner (and future self) proud and tuck the extra money straight into your savings account, mortgage, investment portfolio, or pay off that last stubborn chunk of credit card debt that has been lingering like a bad smell since Christmas. Mine will be going straight into my savings account and, like a squirrel catching wind of a large batch of acorns to stow away, I can’t wait to increase my emergency fund and sense of financial security.
The early bird gets the worm
Whether you are one to keep meticulous records or a master of last minute madness, lodging your tax return is something that you can’t hide from. It isn’t always a fun job, but if you would like your tax refund completed thoroughly and returned sooner rather than later, tackling your tax return early will allow you the time to think of all the deductions you have incurred while they are fresh in your mind. Scrambling to complete returns when deadlines are approaching often means items are forgotten.
If you are expecting to have to pay tax this year, preparing for this early is equally wise as this will allow time to plan for payment before the due date. Set aside some time to sit down and review the past year of income and expenses. This can be a valuable exercise not only for tax but as an opportunity to assess your spending habits over the past year and look at whether the financial goals you set yourself last financial year were met or how you are tracking with any financial new year’s resolutions you made in January.
Panning for gold
Make sure you claim all the deductions which you are entitled to. For a comprehensive checklist, click here to download our 2016 tax return checklist. Some commonly forgotten deductions include:
- professional membership fees
- income protection insurance premiums
- work related education expenses
- portion of your mobile phone bill used for work, and
- home office expenses.
Remember, your individual tax return is due on 31 October 2016, unless you choose to lodge your return through a registered tax agent which will extend the due date up until 15 May 2017.
Adopting good habits
Don’t forget that a new financial year has commenced too, so let’s start off this year as new improved organised efficiency masters. New financial year, new organised you! Make the 2017 financial year a breeze by scanning invoices and saving them straight into a dedicated folder as you receive them and try out a tax record keeping app and or online tool available to track deductions. If you are starting a business, talk to your accountant about software you can be using to make record keeping easy, and talk to your accountant for general tax advice in advance.
A problem shared is a problem halved
As we’ve already discussed, tax time can be painful. But you don’t have to go it alone. If you would like to chat to an accountant to help with the preparation of your tax return, drop us a line or give us a call on 1300 726 082 to find out how we can make the whole process easier for you.
And don’t forget to download your tax return checklist. It’s like listening to your Mum before school camp – we make sure you’ve got everything packed in your suitcase before you head off. But we promise not to make you do the dishes.
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Let’s be honest, we’ve all fantasised about dropping the 9-to-5 daily grind and seizing the freedom of working from home. The question is – how much would your tax return benefit from making the switch?
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Looking to up your professional development education game? You might be able to claim these expenses at tax time!
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