subject: Do you let money trickle through your fingers by not maximising your tax deductions? [print this page] Do you let money trickle through your fingers by not maximising your tax deductions?
Copyright (c) 2010 Nadine DavisFor the average taxpayer or small business owner, keeping up with changes in the taxation rules is outside the scope of their expertise or interest. That is why most people opt for Accountants to prepare their tax returns, but by not paying attention to the expenses incurred in earning income throughout the year, dollars can be lost from savings by not claiming all legitimate tax deductions.Basically, any expense incurred in creating income should be recorded. It is then up to the Accountants, who keep up to date with current tax legislation, to decide whether or not it can be claimed. However, if the expense is not recorded, it slips out of sight.So just what are some of the legitimate expenses that may slip through the cracks?> Travel - normal travel to and from work is not a tax deduction. However, if the usual journey is interrupted to perform work, then the mileage from the place where the work is performed, to the normal workplace, can be a tax deduction. Accurate records of the journey must be kept i.e. date, start and end odometer readings and reason for the journey.> Protective clothing - most taxpayers know to claim for items such as safety glasses, hearing protection etc. However, expenses such as sun protection e.g. sunscreen, hats and sunglasses, for those who work outdoors should be included in any documents submitted to the Accountants at tax return time.> Home office - if the taxpayer has a designated area set aside at home where work is performed, a proportion of the rates, electricity, insurance and even internet fees can be claimed as a work-related tax deduction.> Tax preparation expenses - this is another deduction that most taxpayers would be aware of, but they may not be aware that the cost of travel to and from their Accountant's office can also be claimed as part of the cost of preparing the tax return. Again, accurate records of mileage should be kept.Of course there are others, and all it takes is a mind set where all expense dockets, receipts or invoices are kept in an organised system ready for tax time. Perhaps not every single piece of paper will be a legitimate tax deduction, but when the Accountants prepare the tax returns, they will make an informed decision and advise the taxpayer if the expense cannot be claimed.Taxpayers need to be aware of the types of expenses that could be claimed. If, during the year, they come across an expense they are unsure of, a quick phone call or email to their Accountants will determine if they need to keep records of a particular activity. This saves accumulating a mountain of paper that is useless, and the effort is worth it, because any money not paid out in tax becomes money saved.
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