The last word on tax
While a tax return is a welcome bonus, you have to make sure you have accounted for it, as Anthony Keane and Emma Blake report
YOU work. You pay tax. For most Australians, that’s the simple equation they face.
But rather than baulk at this annual task, treat tax time as a positive experience that will help you share in the $ 27 billion of annual refunds handed back to individuals.
Government figures show more than three quarters of taxpayers receive a tax refund, averaging about $ 3600 each.
Employers should have sent group certificates out by July 14, so there’s no excuse for most people to delay getting some money back from the taxman.
“The information for your financial and tax affairs is usually easier to access and closer to mind right after the financial year closes rather than months and months later,” says Anthony Bell, chief executive of accounting firm Bell Partners.
It starts with making sure you claim all the work- related deductions and other personal deductions you legally can. But be sure to keep it legal, because the ATO is targeting excessive deductions across all industries this year after work- related expense claims rose faster than inflation in recent years.
ATO assistant commissioner Adam Kendrick says last year taxpayers claimed work- related expenses of $ 19.9 billion, up 9 per cent over three years. “There are 13 million individual taxpayers and around 8.5 million of them made a work- related expense claim,” he says. PLENTY OF CHOICE Work- related claims allow you to get back some of the money you have spent on work- related travel and motor vehicle expenses, laundry and uniforms, self- education costs related to your work, tools and equipment, union fees and home office expenses such as part of your energy bills, mobile phone and internet use.
The ATO has specific guides for 30 common occupations that outline what these workers can and can’t claim.
But, Bell says, this year the ATO will be focusing on unusually high work- related expense claims across all industries and occupations.
“The ATO will also be paying particular attention to claims that have already been reimbursed by employers, and for private expenses such as travel to work, mobile phones, private internet usage and entertainment,” he says.
Kendrick says if you are making large or complex claims it’s best to consult a tax agent.
“Our website has some good, down- to- earth practical tips around claims you can make.” PROVE IT Etax Accountants senior tax agent Liz Russell says many taxpayers may not realise they can claim things such as workrelated mobile phone use, which must be documented over a four- week period to satisfy the ATO.
“As tempting as it may be to just pluck a number out of the air, you’ll come unstuck if you’re audited and asked to prove your calculations,” she says.
Deakin University senior lecturer Adrian Raftery, author of 101 Ways To Save Money On Your Tax Legally, says it is crucial to keep receipts.
Workers can claim up to $ 300 of tax deductions without needing receipts, but as soon as you pass $ 301 you’ll need records of the whole lot. BEYOND THE WORKPLACE There are plenty of other tax deductions you can claim if you keep records. Donations to registered charities are tax deductible over $ 2. You can also claim for the cost of using a tax accountant, income protection insurance and superannuation contributions if you’re self- employed.
JUST DO IT: Accountant Anthony Bell says your tax return is easier if you tackle it sooner rather than later.