By Melina Byrne, the Money MavenBecoming tax savvy may increase your tax return. So we asked Jimmy B. Prince, the author of Shares And Taxation and Tax For Australians For Dummies, for his tips on maximising our tax returns.
RESCU: What are three tips for maximising our tax returns?
Jimmy B. Prince:
- Keep accurate records to verify and substantiate all the expenses you incur in earning your income.
- If you hold assets (such as shares) for more than 12 months and you make a capital gain on sale; only 50% of the capital gain is liable to tax. By the way, your capital losses can be deducted from your capital gains.
- If you make salary sacrifice contributions to your complying superannuation fund, you could save paying a substantial amount of tax.
RESCU: When completing tax returns, what are some common mistakes people make? And how can we avoid them?
Jimmy B. Prince:
- Not declaring all the income you derive (for instance cash receipts, interest and dividend payments) and overstating your deductible expenses. It’s important that you keep accurate records and comply with the Tax Laws.
- Not being aware of what expenses you can legitimately claim. You can check the Tax Office website and /or seek professional advice.
RESCU: What are your favourite books and/or online resources for making tax easier to understand?
Jimmy B. Prince:
- Being the author of ‘Tax For Australians For Dummies’ and ‘Shares And Taxation’, I often visit the Tax Office website and check out their publications on various tax topics.
- Check out the latest media releases on the Federal Treasurer’s website and read the daily newspapers to keep up to date with latest developments in tax.
RESCU: We’ve vowed to keep our tax affairs in better order this year. Do you have any helpful hints for us?
Jimmy B. Prince:
- Make sure all the income you derive is credited to one central bank account. This will help to keep track of all the income you derive.
- Use your cheque book to pay all your expenditure and keep all your bank statements and receipts.
- Record all your income and expenditure on an excel spreadsheet on an ongoing basis. This will help you to quickly prepare your BAS or Instalment Activity Statement and tax return at the end of the financial year.
Jimmy’s new book, Shares And Taxation (RRP $32.95) unravels all of the taxation rulings that you’ll need to comply with the moment you start buying shares. It was published by Wrightbooks and is available online and in all major bookstores.
For more advice on tax and your finances, visit RESCU’s finance expert, Anthony Bell’s blog, especially his most recent article, Happy New Financial Year: finance expert Anthony Bell helps you plan a prosperous year.
