What you’ll find in this article:
- Why keep tax receipts and how long to keep them for.
- Why you may need to talk to your payroll about additional tax payments.
- When you’ll be required to look into additional Medicare Levy Surcharges.
- How to best use your tax refund to better your financial position.
- Who you should choose for help with you tax in 2019.
How many times have you heard someone complain about how they wish their school had taught them how to do their taxes instead of, oh we don’t know, how to make pancakes. That’s what Google is for, right? But don’t worry—we’re here to help with our top tax tips for 2019.
Actually, these are tips you will most likely use for every past and future lodgment you ever do. Remember, you should always talk to a fully qualified accountant if you’re having trouble lodging your tax or have any questions related to your circumstances.
Our Top 5 Tax Tips for 2019
1. Keep every receipt and record everything for your tax.
Our number one tax tip for 2019 (and every year before and after) is to keep every single receipt for things you plan on using as a deduction. You know the $5 of stationery you purchased for the office? Get that receipt. And the $385 taxi ride for work-related travel? Definitely record that receipt. Even if you don’t know if you can claim it, record it, keep the receipt and ask your accountant.
Even further to that, you should be logging every detail about travel, working from home, work-related calls on your personal phone—everything to do with your job and making you money. If you’re audited (and yes, it does happen, and often), some items will require a log of specific dates and times, as well as the invoice, receipt or itemised bill.
We often find keeping a spreadsheet of date of purchases, what was purchased, the amount, what percentage was used for work and where the receipt is stored will help both you and your accountant access the information quickly. There are also some handy apps to take a photo of and store any receipts against a specific tax year.
The Australian Taxation Office recommends you keep all records related to your tax for at least 5 years, minimum. However, if you have claimed something with a decline in value, purchase or sell an asset or have a dispute with the ATO, you’ll need to keep the records five years either side of the action.
2. Ensure your payroll are deducting the right amount of tax from your pay.
The tax you’re expected to pay will be worked out by how much you earned over the year, not on a day-to-day, week-to-week or pay-cheque-to-pay-cheque basis. So, if you have a student debt, the odd income from a casual position or anything else that could drive your tax bracket up, ensure you’re having the right amount taken from your pay. Even the luck of a pay rise could leave you with a tax bill.
If you’re not sure how much you’ll be expected to pay at tax time, have a chat with an accountant. They can advise if how much tax is being deducted from your pay now will cover you for your situation. You may need to talk to your payroll about increasing how much tax is deducted from your total pay each week/fortnight/month.
3. Research if you can reduce your Medicare Levy Surcharge
Most Australians who lodge a tax return will need to pay a 2% Medicare Levy. According to the Etax Accountants website, singles earning more than $90,000 and families earning morning than $180,000 are required to pay a minimum addition of 1%, if they do not have private hospital insurance.
Our third tax tip for 2019 is to assess if having Private Health Cover will help lower your Medicare Levy. Your accountant is the best person to speak to about this matter.
Bonus tax tip! Watch out for scams.
This video from the Australian Taxation Office tells you exactly what to keep an eye out for.
4. Spend your tax refund (if you receive one) wisely.
Tax tip number 4 is aimed at helping you better your current financial position by optimising your tax refund. It may be tempting to go buy a new wardrobe or the latest TV but hear us out.
Any tax refund you receive should go to improving your current financial situation, whether it’s reducing credit card debt or a mortgage, investing or putting it into an offset account. Another option is to purchase big-ticket items for your next tax return, such a new work computer, phone or bulk goods.
5. Find an accountant you can trust.
The most important tax tip of all is to find an accountant you can trust and rely on for years to come. Xero recommends finding an accountant who is both certified AND has relevant expertise in your industry. They’ll understand what you can and can’t deduct for your industry and be able to help you build a more stable financial situation.
If you’re looking for an accountant near you, find one on Localsearch!
Disclaimer: This article is for general informational purposes only and should not replace professional advice from a qualified accountant or financial advisor.
Feature image source: Photo by Kelly Sikkema on Unsplash.