This post is brought to you by ITP
The new financial year has arrived and those like us who balance work and parenting need all the help we can get when it comes to maximising our tax returns at tax time.
Not everyone is knowledgeable on the latest changes and tax laws that seem to change with each financial year and unfortunately, work at home mums don’t always have the time and energy to find out a lot about the hows, whys and wherefores. I’ve been there, too. I was just lucky enough to learn over the years and I’ve had lots of help which I will be telling you in a bit. There definitely are things you can do to double your tax return or to reduce the amount of tax you pay. You just have to make sure you’ve done your homework.
Have you been keeping records? It’s important have a separate bank account and credit card for just your business transactions. This will help support your claim that you are operating as a business with the Australian taxation office (ATO). Keeping records, such as receipts, will help you accurately distinguish which purchases are personal and which ones are for the business. Personal expenses and business expenses should be separate. But let’s admit it, we sometimes mix one with the other. So, first off, make sure to review your monthly bank statements and always keep those receipts. Come tax time, our bank statement might not have all of the information needed to support your claim. You can also keep an electronic copy of your receipt such as a photo or there are heaps of APPs out there that can read and store your receipts for you. This year, the ATO is cracking down on unsupported expenses more than ever before.
Pay Expenses (that you know you will be paying within the year) in advance
This includes membership fees, subscription fees and other relevant expenses that have a fixed amount every month. But, only do this if you have sufficient cash flow.
Look at some Applicable Tax Credits
According to the Australian Taxation Office, you may be able to claim deductions for some of your expenses for work whether you have a home office or not as long as you spent it for work. This includes a percentage of gas, electricity and phone.
The Home Office
You can claim deductions if you have a home office. If you are an employee who has a home office and mostly works from that office, you can claim a deduction for the work-related use of your phone, internet and equipment expenses. You will need to keep a logbook of the hours worked from the home office every day for a month to support your claims. The number of hours worked in the month is then averaged out over the entire year, less any weeks away for example, going on holidays.
If your home is also your place of business, you can claim a deduction for the work-related percentage of the utilities such as gas and electricity, business phone costs, equipment expenses, office furniture a portion of your occupancy expenses such as rent, mortgage interest, home insurance, Council and water rates.
It’s important to track your mileage so you know how much driving was conducted for business as opposed to personal driving. The ATO allows you to claim 68 cents per km up to 5,000 of work-related kilometre. You will need to keep a log-book recording all your business travel and odometer readings over a 3 month period if you wish to claim the business percentage of all your car expenses over the year. You must keep all of your car related receipts and only claim the work-related amount. Depreciation of your car may also be claimable using this method. Mileage can be small compared to other business expenses that you can claim a deduction on, but small amounts can add up, right?
Work Related Travel
Business-related travel is also something you can look in to. These include airfares, taxi, UBER, public transport. Accommodation and meals can be claimed for yourself if travelling away from home overnight. If you dine regularly with clients, those expenses are not deductible, so be careful. Don’t forget the deductions for business use of a vehicle as well.
Fringe Benefits Tax are paid by employers for their employees. Employers can claim an income tax deduction for the cost of providing fringe benefits for their employees. According to the Australian Taxation Office, these are the examples of fringe benefits:
- Allowing an employee to use a work car for private purposes
- Giving an employee a discounted loan
- Paying an employee’s gym membership
- Providing entertainment by way of free tickets to concerts
- Reimbursing an expense incurred by an employee, such as school fees
- Giving benefits under a salary sacrifice arrangement with an employee
Get help from experienced professionals
Here’s something I always was torn between as a work at home mum. I really wanted to double my tax return but at the same time, I also really wanted to be able to spend time with my family and get the amount of rest I need to get stuff done for the day. And what I ended up deciding on was seeking advice from the experts. Ain’t nobody got time to understand complicated tax rules and whatnots! ITP The Income Tax Professionals are the best at what they do and a great help to MUMpreneurs like me.
They are registered tax agents – that means they’re more than just accountants. They’ve done the extra stringent training to learn all of the latest tax laws. They know everything you can claim and advise their clients on how they can save money come tax time and into the future.
If you’re looking for a way to minimise your burden and maximise your tax refund, then it’s your lucky day. Because we have some good news for you, mum!
You simply have to use The Income Tax Professionals (ITP) to lodge your tax return this year. Book online at itp.com.au and use the competition code: SAHM19 and you’ll go into a draw to double your return.
Entrant must supply code SAHM19 to enter competition to their nominated ITP tax agent
ITP The Income Tax Professionals are the nominated promoter/s of this exclusive offer to SAHM members
The winner must use ITP to lodge their 2018 – 2019 tax return
Entrants will be liable for the cost of their tax lodgement by an ITP tax agent
The entrant must lodge their tax return by August 31 to be eligible
The winner will be announced September 10
The winner will receive a separate cheque or bank deposit from ITP.
The winner will be announced on SAHM social channels
The winner will be announced on ITP The Income Tax Professionals social channels, website and blog at the discretion of ITP The Income Tax Professionals
ITP The Income Tax Professionals reserves the right to disqualify any entrants or entries where reasonable suspect or unlawful or improper conduct, infringing on ITP The Income Tax Professionals or SAHM intellectual property rights, or if there has otherwise been a breach of the competition terms and conditions.
ITP The Income Tax Professionals comply retaining private and personal information in compliance with the Australian Privacy Principles under the Privacy Act.