Tax time is different for everyone. There are the eager people, who lodge their tax returns as soon as they can, often on the first or second of July hoping to get a refund and there are those who wait until August (or possibly after) due to a range of reasons.

It does not matter what type of tax time person you are, here are some tips for every Australian when it comes to tax time.

Before you lodge your individual tax return

1.  Contact your super fund to see if you have made any after tax (non-concessional) contributions for the financial year. Depending on contribution limits there may be an option for you to claim some of those contributions as a tax deduction.
2.  If you personally paid premiums for an Income Protection insurance policy, these can also be tax deductable, so it is important that if this is you, to contact your financial planner or Insurance provider to find out the amount of premiums paid for the financial year.
3.  Gather your receipts and know what can be claimed, tedious I know, but there are different allowance for those who have had to work from home during COVID-19, so there may be items that you where not previously able to claim. For more information on this, you can visit the ATO website[1].

After you lodge your individual tax return

If you are due to receive a refund, or you have a tax bill due it is important to have a plan in place to deal with either scenario.

1.  If you have a refund, what is the best use of that money, could it be a way to boost your emergency fund, pay off debt, invest or add more to your super fund? Its easy to just have the money put into our bank accounts and spend on daily living but having a plan means you can stop yourself for wasting a potential opportunity to get ahead.
2.  If you have a tax bill, firstly, contact the ATO and see what type of payment plan options you may have. Talk with your employer to see if something has gone wrong on there end.
3.  If you have a tax bill that is not the result of something that can be amended by our employer, this may be a good idea to start planning for next tax year. Take the amount owed and divide that by 26, giving you a fortnightly savings goal so that next year, if the same thing happens you will be in a better position to weather the tax storm.

[1] ATO Working from home expenses – https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Home-office-expenses/

Written by Rebecca Hollis, Financial Adviser (Milestone Financial)

Milestone Financial Services ABN 68 100 591 508 trading as Milestone Financial is an Authorised Representative of AMP Financial Planning Pty Limited, ABN 89 051 208 327 AFS Licence Number 232706, Level 8, 33 Alfred Street, Sydney NSW 2000, Australia.

This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. The examples used are illustrative only and are not an estimate of the investment returns you will receive or fees and costs you will incur.

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