Bank account statements can dish up some very helpful details when it comes to completing your annual tax return.

Check for deductions
It’s important to review your bank statements when you receive them as this will show any fraudulent activity on your account. But at tax time it becomes even more essential.

The tax man is interested in two main types of information – what you‘ve earned, and what you can claim as a tax deduction in the process of earning that income. In these days of electronic payments, plenty of legitimate tax deductions may be recorded and easily accessed in your statements. While you will need actual tax receipts to claim a deduction, your bank statement can remind you what you’re eligible to claim.

For example, the cost of union membership and subscriptions to trade publications can usually be claimed. If you’ve been paying for these by an automatic direct debit, your account statement may show how much you’ve paid and when. It’s often possible to request a tax receipt from a service provider at the end of the year.

 

Income matters too
Make sure you include all the income you’ve earned in the current financial year in your next tax return. If you have a savings account or term deposits you will need to gather statements for these also as interest earned on cash investments is taxable. You can review your bank statements for all interest-bearing accounts, tally the interest earned and include the total in your return.

This is also an opportunity to review the rate your savings are earning. It’s very easy to lose track of this, and it makes sense to regularly check that you’re still enjoying a competitive return. While you’re reviewing your statements, take a good look at the account fees you’re paying. If you think they’re too high it could be time to take your business elsewhere. Switching everyday accounts has never been easier thanks to recent ‘tick and flick’ reforms which see your new bank doing most of the switching leg work for you.

 

Does your bank have your TFN?
If you have an account which pays you interest, take a few minutes to check that your bank has details of your tax file number (TFN). If you haven’t yet handed over your TFN to the bank, now’s the time to do it. You don’t have to provide your TFN but if you don’t, your bank is required by law to deduct tax from any interest earned above a certain threshold.

To learn more about ways to get more from your money, ME Bank’s free 10-minute Banking Health Check could help. Simply contact your dedicated ME Bank Relationship Manager;

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