Top Tips for Maximising Your Tax Refund
With 84% of taxpayers expecting a refund, and the average size of refunds last year reaching nearly $3,600, it pays to spend time ensuring you've got every detail of your return right.
Here are our top tips for maximising your refund this year.
1. 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, a laptop for an office worker or even a handbag or briefcase used to carry work papers.
2. 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.
3. 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 that this income data is correct or complete. Many third parties, such as banks, won't pass information about you to the ATO until late July or early August so early lodgers who use the ATO's myTax system 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 systems.
Most tax accountants won't rely on pre-filled data but will work from your own source documents. This minimises the chances of missing income data for those who prefer to lodge early.
4. Get help!
Get your tax return wrong and the comeback is on you, either with a lower refund or ATO penalties.
Most people (74% 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.
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