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Maximising Your Tax Deductions: Tips from Tax Expert Kiki
As tax season approaches, many Australians could be overlooking potential deductions that could significantly boost their refunds. Tax expert Kiki, known for her insights on social media as "Tax Tips and Tricks," highlights five commonly missed tax deductions that could lead to substantial savings for taxpayers.
Understanding Tax Deductions
Recent research from Xero reveals that over 51% of Australians are uncertain about what is claimable, even though around 58% have made purchases throughout the last financial year intended for deduction purposes. With the ability to lodge tax returns with the Australian Taxation Office (ATO) starting next month, it’s crucial to be informed.
Commonly Overlooked Deductions
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Subscription Costs:
Many individuals forget to claim work-related subscriptions. These can include industry-related publications and professional platforms such as LinkedIn Premium. Kiki emphasises that even services like ChatGPT can be deducted if they’re necessary for your role and not already funded by your employer. However, personal subscriptions, like Netflix, are generally not deductible unless directly job-related. -
Rental Property Expenses:
For those renting out property, expenses such as management fees and depreciation reports are often missed. Kiki advises obtaining a depreciation report before June 30 to ensure the cost is tax-deductible. Additionally, repairs and maintenance (gardening, pest control, cleaning) are also claimable. -
Tax Preparation Fees:
Engaging professionals to assist with your tax return is another area where taxpayers can seek deductions. Any fees paid for this service are claimable in the financial year they’re paid. If you expect to pay between $100 and $300 for tax advice, at a 32% marginal tax rate, this could result in an additional $96 in your refund. -
Income Protection Insurance:
Income protection premiums are typically tax-deductible, but only if paid personally and outside of a superannuation fund. If the policy is through super, you cannot claim this expense. A common monthly premium is approximately $76.75, which could lead to a $295 tax refund given the aforementioned tax rate. - Voluntary Super Contributions:
Lastly, any voluntary contributions to a superannuation fund can also be claimed as tax deductions, provided they’re made before June 30 and a ‘notice of intent’ is filed. Keep in mind the concessional contributions cap, currently set at $30,000, which includes employer contributions. An average voluntary contribution could yield a $480 tax refund for someone in the 32% tax bracket after adjusting for the contribution tax.
Conclusion
Being aware of these deductions can lead to increased tax refunds, with Kiki estimating that combining the costs of tax preparation fees, insurance premiums, and superannuation contributions could potentially boost a refund by up to $871. Aussies are encouraged to review their expenses carefully and claim what they are entitled to in order to maximise their tax returns.
For ongoing updates on tax tips and financial advice, follow Kiki on platforms such as Facebook, LinkedIn, and Instagram.
