Money for jam – getting your tax in order!
I’ll bet you’re wondering, what’s PopEye got to do with jam?
Well, in a roundabout way, quite a lot, as this is an old army/navy expression when easy money was called “ money for jam” ; for example, The Athenaeum, 1919 - "The great use of jam in the Army ... originated a number of phrases, such as 'money for jam' (money for nothing).”
The point being, it’s pretty easy to keep records and absolutely worth a little effort to make savings at tax time!
But why now? It’s not tax-time!
Yes, although tax time is still a few months away, the tax office is already warning that that this year they are paying close attention to what people are claiming as work related expense deductions
However, it’s pretty easy to keep records and absolutely worth a little effort to make savings at tax time!
Claiming a deduction in your tax return
The rules are, that to claim a deduction, you have to show that:
· You spent the money yourself (and weren’t reimbursed)
· The expense was directly related to earning income
· You have a record to prove the expense
Part work/part private expense
· If the expense is for work and private use, you can only claim a deduction for the work-related part
· You can’t automatically claim a standard deduction – so you have to show how you worked out the claim amount
Keeping records to claim a deduction
· If you keep a record of your expenses, this will help to confirm your claims at tax time
How to keep track of expenses
· Bank and credit card statements can be used to substantiate any expenses. See ATO for more details .
· You can also keep track of any expenses using the free myDeductions app from the ATO eg:
o work related expenses and receipts, work car trips, and
o other expenses like gifts or donations you made, and the cost of last years’ return
· If you are a Sole trader, you can also use myDeductions to record any income and expenses.
Using the app is a time-saver and makes it much easier at tax time for you or your tax agent.
Money for jam - what to do with your tax refund ?
If you’ve been really thrifty during the year and looked after your finances, it might be time to loosen up and indulge a little with friends and family
The next priority is to pay down any debt that may be are accruing interest, eg:
credit card debt,
a personal or car loan, or
even a mortgage.
And make sure you take advantage of compound interest – the longer you leave your money to grow, the bigger it gets! So :
· Any leftover funds should go into a long term savings /investment account or
· If you deposit to your super, your funds have the opportunity to grow in a tax- advantaged environment!
You can Contact us anytime for a quick chat or drop us a line for help with managing your tax and your finances.
* money for jam
A very quick and easy way to earn money. Primarily heard in UK. A: "I'm getting paid to stay in my neighbours' mansion while they're on holiday." B: "Wow, that'll be money for jam!" Twenty quid for watching a movie while the kids are asleep? Sounds like money for jam to me!
Farlex Dictionary of Idioms. © 2015 Farlex, Inc, all rights reserved.