It comes around all too quickly, doesn't it? It's the final countdown to June 30, and there are a few things that you can do to prepare your 2012 annual tax return.
As with all things financial, you should speak to your accountant or tax adviser before making any claims in your tax return.
The new financial year will also bring tax cuts for some. If you earn less than $80,000 a year, from July 1 you will pay less tax. How?
The tax-free threshold for those in this income category will triple from $6,000 to $18,200.
However, there are a few things to consider for your 2012 tax return. There are some legislative changes that will alter what and how you can claim some things in the 2013 financial year. So, this may be the last year that you are eligible for some of these claims.
1. Pre-pay your private health cover
You may be aware that the rebate for private health cover will be means tested from July 1, 2012. So, if you are a single earning more than $84,000 or a couple earning more than $168,000 a year, the 30 per cent rebate will be scaled back on a sliding scale.
So, if you know that your earnings in 2013 financial year will exceed these limits, you may be able to pay your private health cover in a lump sum now, and get the maximum rebate.
More: Prepay your health insurance and save
2. Consolidate your out-of-pocket medical expenses
If you incurred out of pocket medical expenses greater than $2,060 in the past year, you can claim a 20 per cent tax offset against those expenses.
Out of pocket medical expenses are costs that you have incurred after any rebates from Medicare or a private health insurer have been made. Specific medical situations may be ineligible so speak to your accountant.
The tax offset against out of pocket medical expenses will also be means tested next financial year. So, if you are outside the income brackets that affect the private health rebate scheme, this may be the last year you can make this medical claim.
3. Gather claimable work expenses
You can claim up to $300 in work expenses without receipts, but it is still always best to have them. If, at any time, the Tax Office audits you, you will be required to show all receipts for any work expenses claimed, including those costing up to that initial $300 claim.
Exactly what you can claim as a work expense varies between different jobs. If you’re not sure, check out www.ato.gov.au/occupations, or speak to your accountant.
4. Gather your rental property expenses
The same as with your work expenses, some things can be claimed in relation to owning and maintaining a rental property. If you have an investment property, now is the time to gather all of the claimable expenses.
Again, if you are not sure what is claimable, ask your accountant, plus the ATO has more information at www.ato.gov.au/rental.
If you have sold a property in the past year, you may be required to pay capital gains tax. If you are unsure if this applies to your situation, speak to your accountant about how to declare the sale and make associated claims.
5. Work out your interest earned
Every bank account, investment account, term deposit and other savings accounts, earn interest. All interest must be declared on your tax return.
Your everyday bank account may only earn you 0.002 per cent interest year, and that’s likely to add up to only a few cents each year. However, even if it’s only a few cents, all must be declared as earned income. If you use Internet banking, you may be able download a list of all transactions and interest earned for easy calculation.
6. Make additional contributions to your superannuation
If you are planning on making a voluntary contribution to your superannuation, now is the time to do it.
Depending on your age and income, voluntary superannuation contributions can be tax deductible or provide some tax concession. Various caps apply, and the contributions must be made directly into a superannuation fund.
Check with your accountant for specifics about how a voluntary contribution may work for you. Further information is also available at the ATO website.
7. Get organised and get advice
Whether you manage your own annual tax return or use the help of a tax adviser or accountant, being organised now is critical.
Speak to your accountant or tax adviser to see if there is additional information that you will need to make your tax return easier and that you pay a fair and reasonable amount of tax.
Costs from engaging your accountant to help manage your tax may be deductible; speak to them for advice.
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