Trying to figure out how much money you can save on your taxes can be difficult, especially since the tax guidelines seem to change just slightly every year. While it might seem like you have a number of months to prepare the information for your taxes, the reporting deadline will arrive faster than it seems like it should. That’s why it’s important that you sit down and start listing out your deductions as soon as you can.
Here are five items to remember that could potentially lower what you owe on your taxes.
- Equipment purchased for work – In many cases, you can deduct any equipment you buy that is directly related to your work. If you work in an office or any branch of technology, you can often write off your laptop or smartphone. If you work in a trade, your equipment can be deducted. Often, you can write off anything that costs under $300. For anything over $300, you can’t deduct it all at once; instead, you have to claim a percentage of the total cost annually. If you are a small business, you are able to claim much more. Contact your accountant for further information.
- Expenses related to your home office – If you have a space in your home that is dedicated solely to work, you can claim expenses related to that space. This includes the office furniture and supplies, of course, but it also includes a portion of your utility bills and even a portion of your mortgage interest or rent payments if you meet certain conditions. The ATO publishes a fixed rate for utilities per year that you can use to calculate how much of a deduction you can get.
- Telco costs – In addition to claiming home office expenses, you can also claim a portion of your wireless internet, iPhone, iPad, and other Telco devices that you use for business. You will, however, need to keep a list of all phone calls you make for work and when you’ve used your internet for work purposes. In most cases, you won’t be able to claim all of your internet or phone expenses.
- Income protection insurance – You can claim the premiums you pay as a tax deduction if they are not paid as part of your super.
- Expenses related to investments – If you’ve purchased an investment property, own shares, or have managed funds, most of the expenses can be claimed. That includes any interest you’ve paid on loans.
When you’re getting ready to file your taxes, go through these five items and make sure you haven’t missed any claims from these categories. Even if you don’t think it’s worth the time to calculate, go ahead and do a rough estimation to get an idea of what you can claim. You might be surprised at just how much you could save, and suddenly, doing the math may seem worth it.