Tax time is fast approaching. Each year, over three-quarters of the total taxpayers, get a tax refund. However, many still miss enjoying this privilege. There are numerous ways to ensure you maximize your tax returns for 2016.
Below are some of the tips that will help you get more from your tax returns.
1. Claim Deductions for a Home Office
You do not require being self-employed to claim a tax deduction for a home office. If you have a formal teleworking arrangement, or you frequently handle emails from home, you are entitled to a percentage of your equipment and running costs for a tax deduction claim. This tax deduction is not limited to the standard internet, computer, and phone costs, but it can also include chairs, desks, and lamp.
2. Prepay the Following Year’s Expenses
For those with a rental property, you can prepay that property’s expenses for up to twelve months ahead. These prepayments can be used as a tax deduction for the current financial year. Additionally, this can include water and council rates, any repairs and maintenance, and body corporate fees. Other expenses that you can prepay are membership fees, income protection insurance and work-related subscriptions for magazines, newspapers, and periodicals.
3. Claim Small Purchases
The easiest way for those who are not self-employed to claim tax deductions is to include purchases under $300. You can add them as long as they have in any way added to your income earning power. Purchases like a Bluetooth keyboard, 1.5TB portable hard drive, or even a wireless router for your home’s Wi-Fi networks can add up resulting in a decent tax deduction off your total income. Make sure you possess the receipts for the purchases.
4. Delay Income
Delaying income is another easy way of reducing your tax liability. This approach is a counter-intuitive one as it sounds. Delaying any expected income in June will leave you with more money at your disposal when it comes to your tax bill. Since taxation happens on the income earned in the financial year, which is from July 1 to June 30, delaying the June’s income to July means it won’t be taxed for this fiscal year. Such revenues could include investments in a property, capital gains from selling shares, salary bonuses. According to this survey, ,tax refunds can help you get the most out of your tax returns.
5. Keep Good Records
Each year, many people spend countless hours trying to track down their receipts for the past twelve months. Misplacing receipts will make you waste a lot of your time searching for them and probably miss hundreds or thousands of bucks on your tax returns. Those people, who lose money during tax time fail to keep track of receipts, are not organized, or even fail to fill in car logbooks regularly. Always ensure you organize your receipts and safely store them.
6. Get Help from Professional Accountants
Most of the people use tax agents during tax time. However, using the help of an accountant in your tax returns will help you save time and stress. Additionally, accountants will ensure you receive a better tax return. Professional accountants will check your return for accuracy and errors. Accountants are also useful in finding tax offsets or extra deductions that you were not aware of. An added advantage of using accountants, any fees they charge are fully deductible on the tax returns of the following year.
Filing your tax returns is a mandatory exercise. However, that does not mean you can get more out of tax returns. Following the above tips among others will ensure you maximize what you get from your tax returns. Honesty during the tax time is of the essence. This is according to this study,where the essence of honesty is much called for.