03/08/2016

Tax time is upon us, so it’s important for Aussies to know how to best minimise tax when they lodge.  

1. Know what you’re entitled to if you work from home

 If you work from home, either all or part of the time, then some portion of the home running expenses can be claimed as a tax deduction. The expenses that you can claim include the work-related portion of:

  • heating, cooling and lighting of the home office room
  • decline in value of home office furniture and fittings
  • decline in value of office equipment and computer
  • computer consumables, stationery, telephone and internet costs claimed on an expense basis

2. Know what you’re entitled to if you study

Amongst the many things you can claim are course fees, textbooks, accommodation and meals if studying away from home, costs of computer consumables and internet and the cost of a computer used for studying which usually depreciates over several years.  That said, there are certain conditions the above must meet:

  • the course must have a sufficient connection to your current employment
  • improve specific skills or knowledge required in your current employment
  • is likely to result in, an increase in your income from your current employment.

3. Have proof of purchase for everything

It’s important to keep proof of purchase for all work-related purchases, even if whatever it is you bought is only used part-time for your work.

Proof of purchase can include receipts and even bank statements and purchases over the amount of $300 must have a receipt.  Even though you may not need a receipt for purchases up to $300 you must have actually spent it in a way that is relevant to your employment you cannot just claim $300.

4. Make filing receipts easy for yourself

Paper receipts in bulk can be a headache to deal with, and fading of ink can make tax time particularly difficult. Electronic copies are now accepted by the ATO as legitimate, and may be a more efficient means of filing.

Take photos of receipts, etc and store them on your phone. Better still, use the H&R Block tax app to store your receipts. Our app allows you to download your expenses and share it with your H&R Block accountant.

5. Claim what you’re entitled to

You’re entitled to claim a deduction for any expense incurred in earning your income. So, if you have incurred a work-related expense, and you have the paperwork to prove it, don’t hesitate to claim it. Amongst the common deductions many taxpayers claim are:

  • costs of transport from work-site to work-site, or when visiting clients or suppliers
  • costs of travel, and costs incurred on meals and accommodation, deductible up to the amount actually spent.  Allowances paid by your employer are taxable
  • costs of tools and other equipment provided it’s used for work purposes (if it’s used partly for work and partly for private use, you can only claim the work-related proportion).

6.  Don’t embellish deductions

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. Avoid claiming deductions without supporting documentation, as they are often disallowed in an ATO audit.

Doing this can land you in hot water with the ATO and lead to fines.

7.  Don’t rely on pre-filled data from the ATO

These days, with the push of a button, you can pre-fill lots of your income information straight from the ATO’s systems. Some people assume that because the data comes from the ATO, it must be right,  but that’s not always the case.

Always use your own information (payment summaries, etc) as the key source data. Many third parties such as banks, pass information about you to the ATO late in July or even into August so early lodgers will often find lots of data missing from their pre-fill.

So if you leave something out and the ATO pulls you up, the burden is on you for not being thorough.

8. Don’t forget the basics

The simplest of mistakes can hold up a tax return. Common mistakes include:

  • change of name or address: Make sure your details are up to date with the ATO before filing your return. If you lodge using different details, the ATO won’t be able to match it with your Tax File Number
  • get your bank details right: the days of the ATO sending out cheques are gone, so make sure your bank details are correct so your funds reach your account
  • spelling: even if one letter is wrong on your name your return could be held up for months whilst the ATO tries to manually match your details.

9.  Be proactive and make life easier for yourself

Taking the time to prepare for your tax return will make the whole process a lot easier.  Each time you receive a potentially deductible invoice file it away somewhere safe with all your other tax related documents. Come tax time you will thank yourself.

10. Get help

Tax is complicated at the best of times, which is why over half of Australian’s turn to an agent to prepare their return.

Most people find it far less stressful to simply pass on all their information to a tax agent and leave it to them to complete their return, safe in the knowledge that the return will be accurate and complete. There may be less well-known deductions that you don’t know you can claim, and experienced agents can often pay for themselves.  Best of all, the tax agent’s fee is also tax deductible!

Find your local office and book an appointment online with H&R Block

 

 

 

 

Book a tax return appointment

With over 440 offices staffed by over 2000 experienced tax accounting professionals, our tax accountants have the knowledge to walk you through the tax refund process with ease. We are committed to offering expert and personal service year-round at a location convenient to you. Find an office and book an appointment online.

Book now

Manage and track your expenses ready for tax time

Download the free H&R Block Australia tax app, designed to help you track your vehicle and work-related expenses and export all the information ready for tax time. The app also includes tax tips, checklists and a tax refund calculator.

Download

Book a tax return appointment

With over 440 offices staffed by over 2000 experienced tax accounting professionals, our tax accountants have the knowledge to walk you through the tax refund process with ease. We are committed to offering expert and personal service year-round at a location convenient to you. Find an office and book an appointment online.

Book now

Manage and track your expenses ready for tax time

Download the free H&R Block Australia tax app, designed to help you track your vehicle and work-related expenses and export all the information ready for tax time. The app also includes tax tips, checklists and a tax refund calculator.

Download