So here are our top tips for maximising your refund this year.
Claim what you’re entitled to…
If you have spent something as part of your work, and you have the paperwork to prove it, claim it. Amongst the common deductions many taxpayers claim are:
- Costs of using your own car for work. This doesn’t include driving to and from work!
- Costs of travelling for work. If you are required to work away from home, and you spend on meals and accommodation, those costs are often deductible.
- Costs of tools and other equipment. Items costing $300 or less are deductible immediately. Items costing more than $300 are deductible over several years. Things you could claim include tools for a tradie or a laptop for an office worker
A good tax accountant will be able to tell you exactly what you can and can’t claim, minimising the chances of an audit at a later date.
But don’t embellish deductions….
You can only claim what you’ve spent. So, don’t inflate deductions in order to get a bigger refund and only claim for costs you can prove you spent, by producing an invoice, receipt or bank statement for instance.
Don’t rely on pre-filled data from the ATO
You can pre-fill lots of your income information straight from the ATO’s systems. Don’t assume though that this income data is correct or complete. Always use your own information (payment summaries, etc) as the key source data. Many third parties, such as banks, won’t pass information about you to the ATO until late July or early August so early lodgers will often find lots of data missing from their pre-fill.
If you omit income and get questioned by the ATO, the legal burden will be on you, even though you’ve taken the information straight from the ATO’s pre-filled data.
Don’t forget the basics!
You need to make sure that the basic details (like your name, address and date of birth) are correct and up to date. If you get it wrong, there will be a data mismatch and you’re tax refund will be delayed whilst the ATO tries to fix the error. Make sure you include your bank details on your return as well, since the ATO no longer sends out refund cheques.
Get your tax return wrong and the comeback is on you, either with a lower refund or ATO penalties.
Most people (74 per cent of all Australians!) find it far less stressful to leave it to an agent to complete their return. This ensures the return will be accurate and complete, whilst an experienced agent will usually be good at sniffing out obscure tax deductions you didn’t know you could claim. Best of all, the tax agent’s fee is deductible.
Mark Chapman is the Director of Tax Communications at H&R Block.