17 Dec 2012

One of the things they say you can't avoid in life ... taxes

 (image sourced from ptglobal.net)

It's 10:35pm and instead of being in bed asleep I'm up rummaging through our boxes and files preparing for our appointment with our accountant.

So here I am, at that time of the year again ... scheduled to see my accountant to hopefully get back some of the cut (tax) the government made on my hard earned money. Ironically they will also take a cut of the amount too. It's odd the world of taxes but as the saying goes there are two things you can't avoid in life ... death and taxes and its a pretty true statement.

I use to get so annoyed at how much the tax man took out of my pay or why they would bother squeezing every cent they could off me, a white collar business (wo)man when there are people out there who blatantly cheat the system. Or how, when I really the needed financial assistance during a period of time I was not working (not because I wasn't trying to find job either) I was ineligible to any government assistance.

I got over my frustration by learning ways to minimise how much the tax man took from my pay cheque. The most sensible or logical way this would occur is if you kept your income or earns relatively low. Obviously the less you earn, the less you get taxed. However most people would rather earn more money then less, so the alternative is to identify ways you can claim expenses against your income. By claiming expenses against your income you are showing cause as to why the government shouldn't tax you as much.

It's not about cheating the system its about claiming what you're entitled to. 

Here are a few items you are eligible to claim a deduction against your tax:
  • You can claim the cost of items purchased for work purposes or associated to your employment such as books (or ebooks), stationery, hardware devices. 
  • Claim expenses related to your job such as courses you've paid for or subscriptions - anything that is associated to maintain or increase your knowledge, skills or ability.  
  • If you perform some of your work at your home office you can claim a portion of the cost associated with running your home office such as electricity, gas, internet etc. Speak to your accountant to get them to explain the boundaries of this deduction in full.
  • You can claim bank charges if the account earns interest. For example some managed funds that may charge fees you can claim the fees associated to that account.  
  • You can claim the tax rebate of 20% for medical expenses (including dental and optical) you incur in excess of $1,500. 
  • You can claim costs and fees associate with your investments such as bank fees, real estate agent fees, repairs, maintenance etc.
You can find more info on what you can and can't claim on the ato's web site here. Many people pay for professional tax advice as they are lazy, or it simply baffles them. But forking out for it can save you far more than it actually costs, when you take into account the whole array of tips they could explain to you, plus the fees are tax deductible. 
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