Here is some must-know advice for Australians who find tax a handful and want to put more money back in their pocket.
Tax time is great for one thing: the money you get might back from the Australian Taxation Office.
The process itself isn’t always a joyride, and while everyone wants to know how they can keep more of their hard-earned money in their pocket, their record keeping sometimes lets them down.
Claiming deductions is usually the best way to reduce the overall amount of tax you need to pay (and boost your refund), but to legally claim your deductions you need evidence such as receipt to back up your claim.
So what can you do to help get the best possible tax refund (even in those cases where the receipt is long gone)?
- Switch to an online tax agent
Old school tax agents often suggest keeping folders, diaries and logs of what you spend and how much of your expenses are work-related. This is hard work and a nightmare to sort out at tax time.
But it’s no longer the 1990s and some tax agents have moved with the times offering simple, easy to use online tax return and tracking tools. The most popular online tax returns are mobile friendly and allow you to snap a photo of your receipt on your phone, and attach it right onto your tax return.
Some even have an app allowing you to save receipts year round so they’re ready to go at tax time. No more lost receipts and missed deductions which means more money in your pocket at tax time.
- Cash in when you work at home
Do you ever work from home out of hours? What about check your work emails from home of an evening or on the weekend or make work related calls on your mobile? If so, it’s likely you can claim at least some your home internet and personal phone expenses as a deduction.
For example, if you pay $60 per month for your internet, and you estimate that 40 per cent of your internet use is for work purposes, that adds up to $24 per month ($288 per year) that you can claim as a deduction on your tax return.
Just remember, if you share the costs with a spouse, partner or roommate, you can only calculate the part of the bill that you actually pay for.
Similarly, if you make work related calls on your mobile phone, estimate the work percentage following the same calculations as above and you’ve got another deduction to boost your refund!
- Sweat the small stuff
While a $5 or $10 purchase here or there doesn’t seem like much as the time, it can really add up over the course of the year. Snap a photo of your receipts for that trade journal, hammer, new work shirt (with a logo) you buy during the year. Then at tax time you have a bunch more deductions ready to add to your return!
Don’t forget if you pay to be part of a professional industry body or union, you can claim the total cost of these fees on your return as well.
- Consider using a tax agent
These days, nearly 70% of Australians use a registered tax agent to help prepare their tax return. Whether you decide to go in-store or online, when you work with an agent, you get the peace of mind knowing a professional has helped you get the best possible refund plus, the fees you pay are tax deductible. On your tax return, simply add in the amount you paid your tax agent last year into section D10 – “Cost of Managing Tax Affairs”.
So if tax is a headache for you, save this article and consider using a tax agent to help make your tax return easier and stress-free this year.
About the author
Simone Gielis is a Senior Tax Agent and General Manager at Etax.com.au, Australia’s number one online tax agent service. Specialising in online taxes since 1998, Etax.com.au enables most Australians to complete their tax return in under 15 minutes.