It’s that time again: As the 2012-13 financial year winds to a close, it’s time to make sure your personal tax house is in order. Gather all your receipts, then take a few moments to review these tax survival tips and ensure you get the tax deductions to which you’re entitled.

Obtain your refund for tax withheld

Where your taxable income for the 2012-13 year is below the effective tax-free threshold of A$20,542 you are not required to lodge an income tax return for the 2012-13 year, following changes to the tax-free threshold and the low income rebate.
However, where any tax has been withheld from your taxable income during the 2012-13 year, the only way you can get that tax refunded is to lodge an income tax return for that year.

Claim all work-related deductions

Claiming all your work-related deduction entitlements may save considerable tax. Check whether you have all the necessary receipts or credit card statements. Allowable work-related expenses may include uniforms, employment related telephone, mobile and internet costs, subscriptions and union fees.
Where you don’t have the necessary receipts on hand, you can still claim up to $300 of work-related expenses necessarily incurred in doing your job. A deduction for laundry costs is allowable where the relevant clothing is protective clothing, a compulsory uniform, a registered non-compulsory uniform or certain occupation-specific clothing.
Moreover, laundry claims of up to $150 do not have to be substantiated even if your total income tax deductions exceed $300.

 

Identify eligible self-education expenses

Self-education expenses can be claimed provided the study is directly related to either maintaining or improving your current occupational skills or it is likely to increase your income from your current employment. However, if the study is designed to enable you to obtain new qualifications in a different field, then the expenses incurred are not allowable.
Typical self-education expenses include course fees, textbooks, stationery, student union fees and the depreciation of assets such as computers and printers, among others. Higher Education Loan Program (HELP) repayments are not deductible.
The Australian Government is currently proposing to cap the deduction for self-education costs to A$2000 effective from 1 July 2014 so it may be prudent to considering bringing forward any eligible study expenses to ensure that you obtain a full tax deduction before the proposed cut-off date.

Deduct home office expenses

When part of your home has been set aside primarily or exclusively for the purpose of doing work from home, costs such as heating, cooling and lighting and depreciating your office equipment or professional library may be allowable.
To typically claim the deduction you must keep a diary for a sample four weeks of the hours you worked at home for that year. This amount is then used to work out your total hours worked for the year and a deduction claimed at a rate of $A0.34 cents per hour. However, no deduction is available for occupancy expenses such as mortgage interest, rent, insurance and rates unless you conduct a business from your home.

Maximise motor vehicle deductions

Where you have used your motor vehicle for work-related travel, and your claim for kilometres travelled for the year does not exceed 5000 kilometres, you can claim a deduction for your car expenses on a cents-per-kilometre basis to the extent you have used your car for work. The allowable rate for such claims changes annually so you may need to obtain this year’s rate from the Australian Taxation Office (ATO) website at www.ato.gov.au. Any such work-related travel claims must be based on reasonable estimates.
Where work-related travel exceeds 5000 kilometres, it may be possible to claim a deduction using the one-third of actual car expenses or 12 per cent of the original value methods without having to maintain a log book.
Alternatively, if you have used your car for a significant amount of work-related travel, then you may be able to claim a deduction for your total car running expenses to the extent you have used it for work. However, such claims are only available where you have the required log book, odometer readings and receipts.
Work-related travel includes travel between two places of work or employment, or travel to shifting places of employment. It may also be available where you have to carry bulky tools or equipment with you from home to work in certain circumstances.

Deduct any eligible depreciation deductions

Where an individual bears the cost of acquiring specific tools or equipment, they may be tax depreciable even if that person is not carrying on a business. Some items can also be claimed if they cost A$300 or less, to the extent that they are used for income-producing purposes and are used or installed ready for use by 30 June.
Such assets include tools, calculators, briefcases, computer equipment and technical books purchased by an employee, or minor items of plant purchased by a landlord.

 

List your rental property deductions

Landlords can claim deductions for a range of expenses such as advertising, bank charges, body corporate fees, cleaning, council rates, electricity and gas, gardening, insurance, loan interest, land tax, lease preparation expenses, legal costs, pest control, postage and stationery, property agent fees and commissions, repairs, secretarial and bookkeeping fees, telephone charges and water rates. You may also be able to write off the cost of certain buildings, depreciating assets and borrowing costs over time. Claim relevant non-work related deductions
Fees paid to a registered tax agent to prepare your return or to manage your tax affairs are allowable in the year the fee is paid, as are ongoing management fees paid to a financial planner.
Bank charges and any interest payments on funds used to acquire shares and other income-producing investments are generally deductible. Donations to charities and other gift-deductible recipients should also be claimed where receipts or invoices are kept.

 

Optimise your tax offsets

Tax offsets directly reduce your tax payable and can add up to a sizeable amount, so it pays to know all the offsets you are entitled to. Eligibility for offsets will generally depend on your income level, family circumstances and other relevant conditions associated with particular offsets or rebates.
Common tax offsets potentially available in the 2012-13 tax year include, among others, the low-income tax offset, senior Australian tax pensioner offset and the offset for superannuation contributions made on behalf of a low-income spouse. The dependent spouse rebate and the mature age worker rebate may also be available, although these offsets are being phased out.
In addition, the private health insurance offset may be available where an eligible rebate has not been received on private health insurance premiums. However, this offset has been means tested from the current financial year and a full 30 per cent rebate will only be available where surcharge income is A$84,000 or less for singles or A$168,000 for families. Where these thresholds are exceeded, the rate of offset reduces until no offset is available for singles and families whose surcharge income exceeds A$130,000 and A$260,000, respectively, for the 2012-13 year.

 

Secure your medical expense offset

A tax offset is also available in respect of certain net medical expenses for the 2012-13 year. “Net medical expenses” is the difference between medical expenses incurred relating to you or your dependants, less any refund you may have already received from Medicare or a private health insurance provider.
A 20 per cent offset rate is available in relation to the cost of net medical costs exceeding A$2120 for singles and families earning adjusted taxable income of up to A$84,000 and A$168,000, respectively, for the year ended 30 June 2013. Where these thresholds are exceeded, only 10 per cent of the cost of net medical costs in excess of A$5000 will be eligible for the offset.
The government announced in its 2013-14 Federal Budget that the net medical expenses offset will be phased out. Essentially, it is proposed that the net medical expenses offset will only be claimable in the 2014-15 and 2015-16 years where it has been claimed by an eligible taxpayer in the immediately preceding year. Thereafter the offset will not be generally available.
Thus, to secure your medical expenses offset for these years you will need to make an eligible claim in your 2012-13 return. You may therefore wish to consider bringing forward any eligible medical costs to before 30 June 2013.

 

Consider tax effective superannuation contributions

A self-employed person will be able to claim their contributions to a complying superannuation fund as fully tax deductible up to the age of 75 in the 2012-13 tax year. However, such contributions will only be deductible if less than 10 per cent of the total of a person’s assessable income, reportable fringe benefits or reportable employer superannuation contributions is attributable to their employment as an employee. Such a deduction cannot increase or create a tax loss to be carried forward.
Employers can also claim deductions for superannuation contributions made on behalf of their employees provided the employee is under 70 in the 2012-13 tax year.
Any excess contributions made by the self-employed or by an employer in respect of an employee will be effectively taxed at a rate of 46.5 per cent rather than 15 per cent. The excess concessional contribution limit for the 2012-13 tax year is A$25,000 for all taxpayers regardless of age.
The Australian Government has also proposed that the effective tax rate on concessional superannuation contributions made by a high income earner should double from the 2012-13 year. This is achieved by halving the tax concession on their concessional contributions from 30 per cent to 15 per cent.
The extra 15 per cent tax becomes payable where the combined surcharge income and concessional contributions up to the cap of A$25,000 exceeds A$300,000.