In this article:
Practical and easy tax tips for mortgage seekers.
With the beginning of the financial year here there are a few practical and easy tips that mortgage seekers could benefit from.
Boost your genuine savings by filing your returns on time
If you are eligible for any form of claim or refund, filing your tax on time could result in receiving this amount quickly. The longer you hold on to funds in your account the stronger your case for a home loan approval.
Your tax gets calculated and deducted based on the assumption you will earn that amount for the entire year. So, if there's an unexpected hiatus in earnings or an income decline during the financial year, all else being equal you may be owed money by the tax department.
Apply for all concessions and deductions you are eligible for
All kind of claims can add to your savings – helping you inch your way to a home deposit. The most recent claim you are likely to be eligible for are working-from-home expenses during the COVID pandemic. If you have supporting bills you can claim the following
- Electricity and gas- heating, cooling, lighting
- Cleaning costs
- Phone and internet
- Home office equipment – you can claim up to $300 for office equipment like printers, monitors, laptop, among other gear. For amounts higher than $300, you can claim depreciation reduction.
You can't claim freebies like food and beverages available to you at your workplace in addition to rent and mortgage.
There are three ways to claim these expenses
- You could claim a flat rate of 80 cents an hour amounting to $8 a day if you work for ten hours leading to $40 a week. You would need to maintain timesheets for such a claim. Also, once you make a claim using this method you can't make additional COVID related expense claims.
- Another option is to claim a flat rate of 52 cents per hour for your electricity, gas, cleaning and furniture expenses.
- Finally, you can claim up to 20% of actual expenses if you experience a 20% increase in gas, electricity, phone and internet usage on account of working from home.
To know more visit https://www.ato.gov.au/individuals/income-and-deductions/deductions-you-can-claim/home-office-expenses/
Pre-Tax Salary Sacrifice
- A lot of employers allow pre- tax salary contributions on items like vehicles, childcare, health insurance, among others. This is available to anyone drawing over $18,200 of the tax-free threshold and is especially useful for individuals on mid to high incomes. You would be surprised at how much you could save through pre-tax salary contributions.
- By opting to be part of the Federal Government's First Home Super Saver scheme, you can make pre-tax salary contributions to your super. With a cap of $15,000 per financial year, your contributions will be taxed at a lower level, letting you accumulate a first home deposit faster. Be aware, though that the accumulated sum can only be used for a first home purchase. In case the amount isn't used for this purpose, it is accessible only at retirement.
Reach out to us to understand which of these methods work best for you.
The information is a compilation from various sources for your benefit and should not be relied upon in lieu of appropriate professional advice.