The former accountant of the late Australian media tycoon Kerry Packer has given his top tips every Aussie needs to know to avoid being a ‘victim’ during tax time.
Chartered Accountant Allan Mason worked alongside the billionaire Kerry Packer at his Consolidated Press Holdings company.
The director of Encore Accounting and author of ‘tax secrets of the rich‘ told Daily Mail Australia his book has ‘truth nuggets’ the ATO does not want taxpayers to know.
‘There’s only two things certain in life, death and taxes. Well, I’ve been doing this for 40 years and I can tell you death is certain but taxes are not,’ Mr Mason said.
‘The bottom line is everybody says, the more money I make, the more tax I pay and that’s not entirely true either.
The accountant said he is on a mission to bust myths about taxation so that the average Aussie can keep more money in their pocket.
‘There’s probably a lot you can do or should try to do,’ Mason said.
‘I would say a good 10 to 20 per cent of taxpayers fail to claim the things they’re entitled to claim because they’re either slack or they just don’t know and people miss out because of this.’
Director of Encore Accounting and author of ‘tax secrets of the rich’ Allan Mason (pictured) revealed his tax tips for Aussies in the lead up to the end of financial year. Mr Mason said he wants Aussies to ‘get educated’ so that they avoid becoming ‘victims’ of taxation
With more than 40 years of experience, Mr Mason wants Aussies to ‘get educated’ and not be victims during tax time.
‘How can the average person ever hope to understand the Tax Act?’ Mr Mason said.
‘It’s complicated and has over 100,000 pages of legislation. If you stack the pages on the floor, it’ll go from the floor to the ceiling.
‘Every year thousands of tax payers under claim what they are entitled to claim. They could have restructured their affairs before 30th June to wipe out a massive tax bill.
‘Planning does matter. Educate yourself. Take control. Buy my new book and read it. It is an easy read.’
He explained most expenses incurred by an employee or business are deductible provided its associated with earning income.
‘While trying to make a good living you’re going to make more money and you want to keep it and not give away half of it to the tax office,’ Mr Mason said.
‘Use it for your family use it for charity that you choose. Use it to help those less fortunate that you choose before the government makes that choice for you.’
Mr Mason’s top tips for employees and business owners to avoid being a victim during tax time.
Mr Mason advised employees and business owners to keep a diary while working from home as they are able to claim up to 67 cents per hour (stock image, woman working from home)
1. Keep a diary while working from home
From the 2022–23 income year, their are two methods available to calculate working from home deductions – the actual cost method and the revised fixed rate method of 67 cents per hour.
Mr Mason explains the revised fixed rate method, which was instituted on March 1, this year, does not require a person to have a dedicated home office space.
Those who work from home are allowed to claim usage of electricity, gas, phone and internet as well as computer consumables, stationary and a portion of the decline in value of depreciating assets including office furniture and technology.
‘Make sure to keep a diary of the hours you spend working from home. Add these up because you are entitled to claim 67 cents per hour,’ Mr Mason said.
‘That money is better in your pocket than with the tax office.’
2. Attend a course, seminar or workshops
Mr Mason explained a person can claim a deduction for the cost of attending seminars, conferences, or training courses that maintain or increase the knowledge, capabilities or skills needed to earn income in their current employment.
‘If you’re a writer, and you attend a course on brick laying that won’t help, you wouldn’t be able to get a deduction on that,’ Mr Mason said.
‘Attend some seminars or courses that are designed to improve yourself in your industry a little bit. This is deductible
People do it all the time, they go to things and learn and sometimes the fact that it is in Surfers Paradise just on the beach is an added bonus.’
Mr Mason added a person can claim a number of expenses while attending a course including registration costs, fares to and from the venue if it is held at a location other than the normal workplace and accommodation and meals during the stay.
Another tip was for Aussies to record the kilometres they travel between work offices and job sites. Mr Mason added workers who drive utes and carry heavy equipment can claim the kilometres they travel (stock image)
3. Claim travel expenses
Mr Mason advises the general rule for claiming travel expenses if a business owner or employee are travelling for business purposes.
While travel to and from home and work is not deductible, travel between office spaces and worksites can be claimed.
He highly recommended everyone to keep a travel diary recording the kilometres travelled each day.
‘The tax office won’t allow you to claim travel from home to work but will allow any kind of travel from one work office to another office,’ Mr Mason said.
‘It also allows for if you go to the bank on your way to the office, pick up some tools, or you’ve got a ute and you need to carry heavy equipment.
‘Those kilometres are deductible. So, keep a record of your kilometres and claim it.’
4. Buy any items needed for work
A person can claim the cost of items including tools, computers, internet, stationery, books, bags, office furniture and the cost of insurance and repairs to some items as long as they are used for work.
Mr Mason explained workers should think about the items they need and try to purchase them in June.
‘Buy it in June and you will get a tax deduction this year. If you buy on the first of July you won’t get it until 2024. So you want to bring us forward,’ Mr Mason said.
‘You want to make sure you need that piece of equipment because you’re saving 47 cents but you’re paying 53 cents. So the benefit is just a little bit below half of what you spend.’
Mr Mason advised Aussies to check their super contributions and top-up if the concessional cap has not been maxed (stock image, woman making a bank transfer)
5. Check if you have maxed out your super contributions.
Mr Mason explained if a person has a total superannuation balance of less than $500,000 from July 1, 2018 to June 30, 2022, they may be entitled to contribute more than the general concessional contributions cap and make additional concessional contributions for any unused amounts.
He added in the first year a person will be entitled to carry forward unused amounts in the 2019–20 financial year. Unused amounts are available for a maximum of five years, after which they will expire.
‘You can go into MyGov and you can see how much super you should paid in prior years,’ Mr Mason said.
‘So if you have a concessional limit of 27,500 and in the last few years you have only put in $10,000. You realise you have a bit of extra cash so you can top it up with another $7,500 that you missed in prior years and put it into super.’
‘You get a tax deduction for it and its your money in your account being looked after by somebody else until you retire.’
6. Consider paying a full-year’s interest on an investment property to avoid capital gains tax
Mr Mason explained this tip is for individuals who have more than one investment property.
If a person sells an investment property they are subject to a capital gains tax – the tax a person pays on the profit made.
Mr Mason said if you sell an investment property and make a profit, consider using that profit to pay the interest on another investment property.
That way, an individual avoids paying the tax on the profit they have made.
7. If a business recorded a loss you can get a refund on tax paid using prepayment rules
This tip applies to individuals that run a business through a company.
If a business records a loss in the current financial year an individual can use prepayment rules to get a refund for the tax they paid when the company recorded a profit in a previous year.
‘If you run your business through a company and this year you are in a loss situation, which many are, did you pay tax in an earlier year like in 2020? Then maximise that loss using the prepayment rules,’ Mr Mason said.
Mr Mason explained a person can carry back the ‘loss’ to a prior year and get a refund of tax paid.
He also advised business owners to use prepayment rules to their advantage by coming up with a strategy.
‘Many business owners miss this one. If you are in profit, then again maximise the prepayment rules, bring forward any repairs, defer any income (by not starting that new job until 1st July). Look at your numbers and plan a strategy,’ Mr Mason said.
Mr Mason was the former accountant of the late Kerry Packer (pictured). He attributes the Australian media tycoon with teaching him to never accept the ‘status quo’.
Mr Mason attributes the late Kerry Packer for influencing his attitude towards taxation and teaching him to never accept the ‘status quo’.
‘[He was] very, very supportive and very respectful even though you might hear to the contrary. He forced you to think about things and he would really go right to the base of what needed to be done and how to handle something,’ Mr Mason said.
‘I learned in those days which carried me through to today is to not accept the status quo to look, dig and see if there is a solution. To not accept that you just gotta pay up and shut up.’
Mr Mason said his book ‘tax secrets of the rich’ is available nationally.
Things to claim on tax for Australians
Australians can begin to file their tax returns after June 30 and have until October 31 to do so.
Below is a list of 10 ways workers can make the most of their tax return.
1. Work bag
Residents can claim back the money they spent on a bag as long as it is used primarily to carry work supplies between their home and the office.
2. Travel
Drivers can keep a logbook of the kilometres they travel and should hold onto the receipts of any expenses they pay for including food and accommodation.
Workers who are required to drive around a lot can also make a claim on their tax return
3. Occupation and industry guide
Workers have been told to check the occupation and industry guides set out by the ATO to find out what items they can claim back in their industry.
4. Work from home expenses
5. Pre-pay expenses for investment properties
Homeowners with an investment property should pay their strata fees or insurance in advance in order to reduce the amount they can claim next year
6. Self-education material
Employees can also get money back if they purchased any materials to further their education in their industry. This includes books, magazines and newspapers.
7. Union fees
Workers can claim back any fees they have paid to be represented by a union.
8. Super contribution
Australians can make a one-off payment to their super from their post-tax savings at the end-of-financial year.
9. Donate to charity
Residents can claim back any money they donated to a charity.
10. Invest under a company name
Investing money under a company structure to save 17 per cent on your investment income.
