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Do the homework on tax

The penny dropped recently that I have earned a lot more income this year via part-time work — I am a singer when I don’t do my office job. Do have any last minute tips for someone like me?

The first tip is to consider going to an accountant or a very good tax agent who can understand your part-time work and can see legitimate deductions. For example, if you are a singer and you are being paid, you could claim a wardrobe allowance, the cost of the hairdo expenses, travel to the jobs, etc. The cost of an expert is nearly always recouped many times over because they know what you don’t know. If you don’t like the idea of paying for advice, I would talk to people you know, both in your workplace and in the entertainment community. Talk tax with these people and ask them what they claim, but make sure they have been advised by a tax agent. Also visit the ATO’s website — www.ato.gov.au. It actually is a great source of information and shows what legitimate deductions there are for various occupations. I have to say it’s important that you have receipts to justify your claims, but if you don’t, you can use a diary and/or your credit card statements to prove that certain expenses link to specific engagements. Try to understand that a deduction is legitimate if the outlays were made in order to derive the income upon which you ultimately will pay tax. Here is my best tip for you that might not save you money this year — get serious about your tax bill and do some homework. If you’re paying too much tax because of ignorance of what you are entitled to claim, it could cost you tens or hundreds of thousands of dollars if the tax savings were, for example, put into your super fund!

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice. 

Published on: Monday, April 12, 2010

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