When it comes to the EOFY there’s no ‘one size fits all’ approach to preparing and lodging a tax return. Follow these 10 expert tips to gain the most from your return.
Tax time is nigh! Finance expert Justine Davies has partnered with Officeworks to take the stress out of tax time and help you maximise your tax return this financial year with her top 10 tips.
1. Know what to claim
If you run a home office for work or study purposes, familiarise yourself with the items that may be tax deductible including office furniture, stationery, technology, software and a portion of utilities, phone bills, insurances and charitable donations. If you’re unsure, browse the Australian Tax Office website.
2. Get the expert opinion
Make an appointment with your accountant as soon as the financial year begins. That way, you can put in place any investment and deduction strategies to maximise your return and implement it before 30 June.
3. Maintain an organised office
If your home office is a mess, you might find it difficult to keep on top of administration tasks and likely to misplace important tax paperwork. Make your office space efficient by investing in a filing cabinet, scanner, printer, filing trays etc. Remember most of these items may be deductible if you work from home.
4. Save digital copies
To lodge your tax return, you’ll need adequate purchase records. The ink on most receipts fade, so be sure to scan them and keep a copy on digital storage – having all your documents saved to one file also makes for a seamless process come June 30.
5. Keep a track record
Claiming on items used solely for work or study at home (such as accounting software or stationery) is straightforward. For costs that are split between personal and business use, such as your mobile phone or running costs, you’ll need evidence to support the proportion of cost you wish to claim. Keep an accurate record of home office expenses such as an itemised phone bill or diary entries over a minimum four-week period.
6. Bring forward expenses
Another tip to maximise your tax return is managing your bill payment schedule to fall within this financial year – the more expenses you can claim before June 30, the bigger your tax return could be!
7. Tell your employer if you take on a second job
A common tax error is taking on a second job and claiming the tax-free threshold ($18,200) twice by mistake - this often results in a tax bill rather than a return! Make sure you clear this off with your employer immediately upon starting a second job.
8. Check your thresholds
There are a number of tax offsets and rebates that may be available to you, so check how close you are to the relevant thresholds. Some examples include the net medical expenses tax offset, the low income earners tax offset and the health insurance rebate.
9. Keep the Department of Human Services updated
The amount of government benefits you are entitled to will depend on your family’s income level. If you discover that your earnings have changed when compiling your tax return, be sure to let the Department of Human Services know. The organisation offers an online estimator to help you determine any level of payment you may be entitled to. It’s important that you get onto this well before June 30 as it can take some time to lodge and receive the required forms.
10. Lodge your tax return on time
It’s a shame to do all the hard yards of collating your paperwork – only to lodge your return late. The deadline will differ depending on your method of lodgement; make sure you check it out so you don’t run the risk of a fine or general interest charges. Ask your accountant for a list of key lodgement dates, or visit www.ato.gov.au.