Working life brings returns
Make the most of your annual tax return, writes Daniel Hoy
WORKERS can cash in on thousands of dollars in tax refunds by being organised and adding up costs of doing their job, whether it be at home or in the office.
With flexible working conditions and new technologies continuing to increase in the modern work environment, there is a raft of new ways in which workers are spending money for work. And those costs can all be claimed from the taxman.
Making the effort to improve your career prospects also may be tax deductible, with self-education course fees, coffees for a mentor or purchasing the tools to do extra work away from the workplace all tax deductible.
But the most gains may be made simply by being on the ball when filling out the tax return or seeking professional support. If you are not wise to the latest possible deductions, you may miss out on cash to which you are entitled.
‘‘ Most people just claim the $300 deduction that the tax pack tells them and disregard the remainder of the deduction,’’ says accountant Brad Callaughan, of Callaughan Partners.
‘‘ In some cases, when we see someone who has been preparing their own tax return, we have reverted to amending their last year’s tax return to get them the refund they are entitled to.’’
Statistics from the Australian Tax Office show the average tax refund for workrelated expenses is $2110. Still many only claim the $300 available if you can’t provide receipts.
Callaughan says the key when it comes to maximising the return each year is organisation. ‘‘ Not only will keeping all your receipts organised and filed help you increase your tax refund but it will reduce your accounting costs and will also allow you to pass an audit if you ever get asked produce them,’’ he says.
‘‘ If you are looking for some extra deduction, then look at prepaying some items or topping up your super through salary sacrifice.
‘‘ If you are not sure if you can claim it, just keep the receipt and ask your accountant. If you don’t ask, you will never know.’’
As work/life balance blurs the line between work and recreation, it can be tricky to work out which costs are solely associated with work.
The advent of smartphones and tablets has meant most workers are in constant contact with the office, whether by text message, phone calls, emails or downloads.
‘‘ You can claim a percentage of mobile phone usage that relates to business use. So if that business use is for emails and the data downloads then you could claim that,’’ Callaughan says.
The purchase of apps solely or partly used for business also can be claimed.
Working from home also opens up possible deductions.
Callaughan says workers at home can claim greater shares of household running expenses, such as phone rental, business calls, internet fees, depreciation of office furniture and equipment and any additional heating, cooling, lighting and cleaning expenses.
They also may be able to claim occupancy expenses, such as rent, mortgage interest, rates, land taxes and house insurance premiums.
With one week left until the next financial year, now is the time to start preparing for next year’s return.
CPA Australia advises workers to bill all expenses to a single credit or debit card to more readily locate and keep track of costs and receipts.
Diaries for motor vehicle and home office use also are advisable to have on hand.
MOST COMMON MISTAKES MADE ON TAX RETURNS
Omitting income: Remember to collect a group certificate from any employer you have worked for since July 1, no matter how brief a time period it may have been .
No records or lost receipts: Written evidence is very important to support any claim. Always ask for a receipt for work-related expenses and keep them in a special file or folder.
Not lodging a tax return: Only 55 per cent of the population lodged a tax return in 2010/11. Make the effort to reap the reward or face serious legal repercussions if you don’t. Spell your name correctly, include your full date of birth and put your first and surname in the right order to help you receive the correct refund.