Footy finals are here and that heralds with it the arrival of Spring. It also means for those of you lodging your income tax returns via myGov, the deadline is just 8 weeks away!
To assist with maximising the refund on your tax return, consider these 5 handy tips:
1. Work specific claims
If you are an individual receiving a wage, you’ll only be able to claim expenses that directly relate to the income you earn. For instance, if you are a PE teacher and you are required to work outdoors then you will be able to claim specific deductions such as sunscreen.
2. Concessional Superannuation Contributions
Did you make any contributions into your superannuation fund before 30 June 2018 of which you wish to claim as a tax deduction? Effective 1 July 2017, the 10% maximum earnings test was removed and your superannuation fund should have sent you a ‘Notice of intent to claim’ form. You will need to complete this form and receive an official notice acknowledging your claim before you can include a deduction on your tax return.
3. Home office expenses
With the advancement of technology more of us are able to work from home. If you are an employee who regularly works from home you may be able to claim a tax deduction for your home office running expenses, phone and internet. There are various ways you can work out your claim and the ATO website is a great starting point!
4. Income protection insurance premiums
Income protection premiums paid personally (not from your superannuation fund) are generally tax deductible. So make sure you don’t forget to leave out this expense when completing your return. Your insurer should have sent you a ‘notice of premium paid’ that clearly outlines your deductible premium amount.
5. Donations
Donations greater than $2 that are made to a Deductible Gift Recipient (DGR) charity are tax deductible so don’t go throwing out those receipts just yet! Be aware however that donations made to overseas charities are unfortunately not tax deductible. You can check an organisation’s DGR status via the ABR website.
While everyone is keen on maximising their tax refund, claims must also be reasonable and able to be substantiated. We stress the importance of substantiation for all the claims as the ATO is currently paying close attention to work related expense. The two key elements are incurrence of the expense in relation to work and documentation/substantiation, as the ATO will often refuse a deduction where substantiation is not sufficient.
When preparing your tax return, remember to declareincome from all sources. Remember to include all your interest income, dividends, distributions, foreign income and amounts from any capital gains/losses from sale of shares or properties. Also, don’t forget to include the occasional Uber driving that you may be doing! With the advancement in data matching technology, the ATO has all your information and a very accurate estimate of what your income is, even before you start preparing your tax return.
Getting your tax done right gives you both piece of mind and more time to focus on the important things in life. It also saves you the stress of potential fines and penalties if errors are found in your return.
If you find your return is getting more complicated don’t hesitate to contact one of our trusted tax advisors for assistance, the Accru specialists are always here to help.