Money pro reveals FIVE of Australia's most ignored tax breaks: The 2022 Tax Hack
Finance professionals reveal FIVE of Australia’s most neglected tax deductions that can earn you thousands of dollars
- The Director of Tax Communications has revealed an easy way to lower your taxes
- Little-known deductions include claiming back from professional membership
- It is also recommended that insurance premiums against loss of income be deductible
A financial expert has revealed five of Australia’s most neglected tax cuts – including not claiming professional membership and forgoing property rental fees.
Mark Chapman, Director of Tax Communications, H&R Block told Yahoo Finance how Australians can claim back thousands of taxes as many prepare to file in the coming weeks.
First, he suggests claiming a membership fee for any professional or trade association of which you may be a member.
Mark Chapman, Director of Tax Communications, H&R Block told Yahoo Finance how Australians can claim back thousands of taxes as many prepare to file in the coming weeks (stock image)
This can cover the costs of union membership or investment magazine subscriptions.
Mark also recommends prepaying your fees or subscriptions for the next tax year before June 30, 2023, then you can claim the deduction for this year.
Tax experts also reveal that people with rental properties can not only claim interest deductions on their mortgages, but also do household chores, such as gardening, repairing, advertising tenants, and cutting locks.
You can even claim back the deductions for this year’s tax return costs if you pay a tax professional to complete last year’s tax returns, Mark reveals.
This includes all travel expenses you incur to visit the agency.
Any time you pay tax advice over the years is also deductible.
Mark also suggests anyone paying insurance premiums against lost income can claim this on their taxes.
However, this does not include life insurance, critical care insurance or trauma insurance.
A final little-known financial hack Mark shares is how to make additional soft contributions up to your limit (currently $27,500) and claim an income tax deduction for doing so.
“This means you can effectively tax your supercharge, as long as you don’t overstep your concessional contribution limit,” he said.
‘Super security payments made by your employer, as well as foregone payroll contributions, are also included in your concessional contribution so effectively the amount you can pay to super through tax deduction contributions is the difference between those other contributions and the $27,500 limit.’
This means that if you have cash in reserve, you can increase your retirement savings while also claiming a tax deduction.
This payment must be made within the current tax year.
If you choose to super-upgrade, you will also need to notify your superfund that you made a payment at the time you file your 2023 return.
It comes after the Australian Tax Office (ATO) advised that from 1 July 2021 onwards, people paying for rapid antigen tests for work-related purposes can claim it as a deduction.
You may also be able to claim a deduction for items such as gloves, face masks, or cleaners used for work purposes, so make sure you keep receipts.
But the biggest pandemic-related claim for most people is the 52c allowance for every hour spent working from home.
Ten tax hacks to increase returns
Australians can start filing tax returns after 30 June and have until 31 October to do so.
Below is a list of 10 ways workers can benefit from their tax returns.
1. Briefcase
Occupants can claim back the money they spent on a bag as long as the bag is used primarily to carry work supplies between their home and office.
2. Travel
Drivers can keep a logbook of the distances they have traveled and must keep receipts of any expenses they pay including food and accommodation.
Workers who have to commute a lot can also claim their tax returns
3. Job and industry guide
Workers have been told to check the job and industry guidelines set by the ATO to see what items they can reclaim in their industry.
4. Work from home
Employees can still claim 52c for every hour they work from home.
5. Prepaid fees for investment properties
Homeowners with investment properties must pay their strata or insurance fees upfront to reduce the amount they can claim next year
6. Self-education materials
Employees can also get cash back if they purchase any materials to further their education in their industry. This includes books, magazines, and newspapers.
7. Union fee
Workers can claim back the fees they have paid to be represented by the union.
8. Super contribution
Australians can make a one-time payment to their super from their post-tax savings at the end of the financial year.
9. Donate to charity
Citizens can claim back the money they donated to charity.
10. Invest under the company name
Invest money under a corporate structure to save 17 percent of your investment income.
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