Hoping for a juicy tax refund? Ten simple steps can help you get the max from your tax return.
A bit of extra cash always comes in handy, and last year alone the tax man handed back a whopping $28 billion in personal tax refunds. With that sort of money up for grabs, it’s worth following our ten steps to enjoy the difference between a ‘meh’ refund and a tax cheque worth celebrating.
1. Get organised
The Tax Office is a big fan of paperwork to back up any claims you make. So pull together all your receipts and invoices as well as payment summaries and bank statements. Then sit back and relax, you’re ready to tackle your tax return.
2. Work expenses – know what’s available
Chances are you’ve spent money in the process of making money, and a whole raft of work-related costs can be claimed on tax – everything from sunscreen for outdoor workers to the cost of laundering professional uniforms. Check out the Tax Office website for a virtual A-Z of expenses that are tax deductible.
You’ll need receipts for individual costs if the total of your work-based expenses comes to more than $300, and remember, you can’t claim back costs that have already been reimbursed by the boss.
3. Don’t overlook work from home costs
Some of us spend at least part of our week working from a home office. If that sounds familiar, you may be entitled to a deduction for work-related phone calls, a portion of your home power bill and depreciation of equipment like a desk and chair.
If you’re not sure how much you’re entitled to claim, jump onto the Tax Office’s home office expenses calculator.
4. Consider claiming digital devices
If you use your laptop, mobile phone or tablet for work, you might be able to claim at least part of the cost on tax. You’ll need to divide your tax claim according to work use. For instance, if your tablet is used half the time for private matters, you can only claim half the cost on tax but it’s still a handy tax break.
5. Have you travelled for work?
The tax man doesn’t let us claim the cost of travel between work and home. But that doesn’t rule out being able to claim work-related travel altogether.
If you travel between different sites, say, from a head office to a separate branch office, or if you visit clients, the cost is usually tax deductible. If you hold two jobs, the cost of travel between each workplace can normally be claimed on tax.
6. Think back to charitable donations
Tax time is when the feel-good factor of charitable giving can really kick in. Donations of $2 or more to registered charities are tax deductible. You’ll need a receipt for large gifts but if you’ve handed some loose change to a street collector you can still claim the donation without a receipt as long as it’s less than $10.
7. Have you improved your qualifications?
The cost of attending courses that relate directly to your current job are tax deductible but strict conditions apply. If you’re a hairdresser for instance, you may be able to claim the cost of attending a seminar on hair care products. But if you’re a sparky hoping to make a career change to a zookeeper, you won’t be able to claim a tax break for a course on animal welfare.
8. Be honest about your income
Okay, claiming everything you’re entitled to makes sense. The flipside is that the tax man wants to know all about the income you’ve earned. Interest on savings accounts, dividends on shares and even capital gains on the sale of an investment – it’s all got to go in your tax return.
The Tax Office uses a high tech data matching process to identify overlooked income, and along with a ‘please explain’ from the tax man, you could cop penalty charges and interest on any unpaid tax. It works out cheaper to get it right first time.
9. Head online to turbo charge your refund
If you’re happy to prepare your own tax return, the government’s online lodgement system ‘myTax’ has been upgraded while the older e-Tax has been put to bed.
Even better, myTax prefills some information – like wage and salary payments and interest earned on savings accounts. It can speed up the time taken to complete your tax return and fast track delivery of your refund. If a DIY approach sounds like you, your tax return needs to be lodged by 31 October.
10. Invest in professional help
Speaking with a registered tax agent can be a smart way to be sure you’re claiming everything you’re entitled to, and the cost can be claimed in next year’s return.
If you plan to see a tax agent for the first time, or you’re changing to a new tax agent, you need to have it sorted before 31 October.
This extra cash in your coffer could be the addition to your income that gets your closer to that dream home. What’s not to love about tax time.
This article was originally published in 2017.