A few days ago I posted a thread to discuss whether fines should be income tested and have seen some very valid points around rich people using strategies to minimises their tax so they barely pay any tax to ATO.
So I am starting this thread to see tax saving/minimising tips from fellow ozbargainers.
I think it's fair I start this thread with my own tax minimising tricks
- I don't have a work supplied phone so I claim 50% of usage as work based. (I landed at 50% based on usage pattern over 6 months)
- I claim work related expenses (from memory I don't need receipts for combined expenses below $150 e.g. laundry)
- I also work from home in the evening most weekdays and some weekends as well as some full weekdays. So I claim 25% of home broadband as work related expense. (Again based on the usage patterns over a period of 6 months)
- If I buy a technology devices such as a laptop or a tablet (my work allows us to bring our own device to work) e.g. this FY I bought a surface pro 4 so I plan to claim tax deduction on it.
- I do my own tax so I don't pay an accountant. If I did tax through an accountant then I claim their fee the following year.
- Work related study. I didn't do this in the recent past but when I did I claimed deduction (once I even got private ruling from ATO to ensure eligibility)
- Interest (after expenses) and depreciation and other related costs for investment property (I currently rent to live)
- I don't have any other work related expenses that I can claim.
- Save money in mrs name as she is on lower tax bracket so tax on interest is lower
- I claim child care rebate of $7500 a year, last year total cost was around $33k for one child. (not eligible for CCB)
So what other ways do you save on tax?
@unclesnake:
Thanks unclesnake. I'd love to hear if your wife has any details. I didn't know charities would give receipts for donations - but maybe there is something I am missing that she knows.
As for property, it's always a great time to buy a house in Australia, just ask any real estate agent!
I think the most likely thing in the next 5 years is house prices will do very little. Maybe down and up and down a bit. If unemployment goes up dramatically (thanks to a China crash, say) or other economic headwinds hit, house prices could drop - but in such a circumstance banks wouldn't want to lend you money so it is no benefit to you.
I used to think my stroke of genius was living in cheaper places so we could pay down the mortgage quicker. Sadly, it turns out I should have taken the biggest mortgage I could afford, and then doubled down every three years for the last two decades. It irritates me that my prudent financial decisions have been so massively dwarfed by the house price speculation monster. When we bought our first flat in 1997 we joked that the bank would lend us $350k (we spent $180k). If we had taken that loan and done nothing else, we would have a nearly paid off $1.5m house. But it was a stupid amount of leverage then - even though it would be considered incredibly conservative for a first home buyer now.
So my advice is to buy a home you will be happy living in for a few years. Worst case is it drops in value - big deal, you have a roof to keep the rain off, just keep paying the mortgage. Regardless of what property prices do in the mean time, in 25 years you will own your home and not have to care about rents or interest rates. If it turns out property prices drop a lot, buy an investment. If they don't, use any excess cash to pay down your mortgage. As a renter, you have a precarious existence, you can't bang in a picture hook or paint a room a colour you like. Owners have responsibilities and costs, but you need to accept them one day because you don't want to retire with a fixed income but escalating housing costs.