Tax time - 5 hidden ways to boost your tax refund

1. Know what you can claim as an investor

Investors can claim a variety of expenses related to managing their portfolio. Along with the cost of investment journals and subscriptions, you may also be entitled to claim the cost of internet access and depreciation of a computer used to keep tabs on your assets.

To work out what you can claim, pull together any receipts for expenses like monthly internet charges. Then, look at how much time you spend monitoring your investments – as distinct from general use, to determine the relevant portion of costs you can claim.

2. Grow your super

Plenty of working Australians are eligible to claim a tax break for personal super contributions – you don’t have to be self-employed.  

This financial year, the limit for concessional (before-tax) contributions is $25,000 – a figure that includes your employer’s 9.5% contributions under the Superannuation Guarantee plus any salary sacrifice contributions of your own.

If the boss chipped $15,000 into your super this financial year, you may be able to claim a tax break for up to $10,000 in personal contributions. For a middle income earner, even a $1,000 contribution can boost your tax refund by $325.

Be sure to complete a notice of intent form that lets you super fund know you’re claiming contributions on tax.  You’ll need to receive a written reply back before you can lodge your tax return.

3. Get ready to claim work from home costs

When the pandemic hit last year, many of us were forced to work from home during lockdowns. It saw the Tax Office introduce a simple way to claim work from home costs, with a tax deduction of 80 cents for every hour worked from home. This deduction applies even if you don’t have a separate work area like a home office or study.

That same deduction has been extended to the current financial year but you need records to prove your claim.

Use the weeks ahead to pull together timesheets, rosters, a work diary or similar documents (like a spreadsheet) that show the hours worked at home. Multiply the total hours by 80 cents to arrive at your deduction. If, for example, you worked from home 16 hours each week for a total of 30 weeks during 2020/21, you should be able to claim $384. 

4. Protect your income

Income protection insurance can be a financial lifeline if you can’t work due to illness or injury. Better still, the premiums are normally tax deductible.

You may have income cover through your super fund. But this is worth checking – it’s not always including in a fund’s default cover. Income insurance can be an extra with additional premiums that members need to opt in for.

Check with your fund if your income is insured. If it’s not, think about buying cover outside of super. This way you can be sure you have adequate protection, while also ramping up your tax deductions.

5. Sweep a broom through your portfolio

June is a great time to health check your portfolio. Investors can find they have a few dud investments – maybe a share or two that has continually underperformed, but they hold onto it in the hope that a comeback is just around the corner.  Clearing your portfolio of chain-draggers frees up capital to be invested in higher quality assets.  

If you do sell investments at a loss, bear in mind that capital losses can only be offset against capital gains – not your regular income. So, a Marie Kondo-style tidy up of your portfolio can be a timely strategy if you’ve realised big gains on other investments sold during the financial year.

The key word here is ‘realised’. Capital gains are only taxable when you’ve sold an investment.

Are these steps worth the trouble? Absolutely! Just a single extra deduction can add big bucks to your tax refund. Always speak to your tax professional to know exactly what you’re eligible to claim.

Effie Zahos is an independent Director of InvestSMART, money commentator at Canstar.com.au and Channel 9 Today Show.