The top 6 most helpful tax time tips
The end of the financial year is fast approaching and that means tax time is looming. If you want to get the most out of your tax return (and who doesn’t!), it’s important to be organised and ensure you claim everything you’re entitled to – so you can maximise your refund and minimise your liability. Here’s how to get started.
1. Gather your information
At tax time you’ll need documentation confirming:
- All of your income – that includes your wages, as well as any bank interest or dividends received, money received from side hustles and any other taxable income you’ve received during the year. It’s also important to be aware of what you don’t need to declare to the Tax Office, such as some pensions, prize winnings and gifts, and income received from boarders or flat mates.
- Your health insurance premiums
It’s also a good idea to have last year’s tax return handy as well as details of your spouse and children, and a list of expenses. Whether you’re going solo or working with a professional, gathering this information will lead to a smoother process at tax time.
2. Know what you can claim
There are many types of expenses that you can claim as tax deductions, and these don’t always need to be work-related - but what and how much you can claim will depend on your occupation. According to the ATO, claimable items can include:
- Cars, transport and travel - deductions for car, transport and travel expenses you incur in the course of your work
- Tools, computers and items you use for work - deductions for tools, computers, internet, stationery, books and other items you use for work
- Clothes and items you wear at work - deductions for clothes, glasses, protective gear and other items you need to wear for work
- Working from home expenses - deductions for expenses you incur to work from home such as stationery, energy and office equipment
- Education, training and seminars - deductions for self-education, conferences and training. You can't claim children's school fees or care
- Memberships, accreditations, fees and commissions - deductions for union fees, professional memberships, working with children checks, agency fees and commissions
- Meals, entertainment and functions - deductions for some meals, snacks, overtime meals, entertainment and functions
- Medical expenses - deductions for some medical assessments, vaccinations, and COVID-19 tests
- Gifts and donations - deductions for gifts or donations you make to deductible gift recipients
- Investments, insurance and super - deductions for investment expenses, income protection insurance, personal super contributions and foreign pensions
- Cost of managing tax affairs – a deduction for expenses to manage your tax affairs, such as lodging with a registered agent
3. Familiarise yourself with Government incentives
Take advantage of any government incentives or tax breaks that are available from time to time. For example, you might be eligible for the Low and Middle Income Tax Offset (LMITO) or the Small Business Instant Asset Write-Off scheme. Stay updated with the latest announcements from the government and consult with a tax professional to maximise your benefits.
4. Manage your tax return
From completing your return form to knowing when and where to lodge it, it’s important to have a focused approach. Completing your tax return will enable you to gauge your tax liability, as well as schedule tax payments and organise a refund if you’ve paid too much tax. You can lodge your tax return online through myTax, a service offered by the Australian Taxation Office.
5. Hire the help of the appropriate professionals
If you have a simple tax return, the DIY approach is probably fine, but the reality is that there‘s only so much most of us can do without the help of a tax professional. There are many options available, including online services, shopping centre tax kiosks, tax agents, and accountants. They can help you to deal with the problematic parts of tax planning and income tax return preparation - and their fees are tax deductible.
6. Moving forward – be more tax-efficient
A great strategy to minimise your tax obligation is by placing your spare money in a tax-efficient environment. Consider making additional contributions to your superannuation savings. Depending on your income and circumstances, you may be eligible for tax benefits by making personal contributions or salary sacrificing. Just be mindful of the contribution caps and seek advice if necessary.
A final word
Tax time can be stressful, especially if you end up owing money to the ATO. If you have a tax debt or you’re in a financial bind, remember we’re here to help. Just take a look at our cash loans to $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours.