7 tips to prepare for tax time and maximise your tax return
End of financial year (EOFY) sales aren’t just a great source of money-saving deals - they’re also a timely reminder that tax time is just around the corner!
Lodging your tax return can be a stressful and overwhelming process. But it doesn’t have to be! To make tax time simple, quick and easy, we spoke to our friends at leading tax experts, H&R Block, to provide you with tips on how to best prepare for, lodge and maximise your tax return.
Don’t hit snooze on your tax return this year. Read on for answers to some tax time FAQs to help you stay on track and in control this tax season.
1. When do I need to lodge my tax return?
If you lodge your tax return yourself you need to lodge with the Australian Taxation Office (ATO) by 31 October. You can start lodging your tax return from July 1.
If you use a tax agent or accountant to complete your tax return, you will be eligible for an extended tax return deadline. This deadline can vary depending on your circumstances, but can be as late as May 15 in the following year.
It is important to note that if you want to use an agent like H&R Block and take advantage of this extension, you need to sign up with the tax agent prior to October 31.
As long as you stick to the lodgment deadlines and have all the information and paperwork you need before you begin preparing your tax return, doing your taxes should be simple and stress-free, just like the team at H&R Block say:
“By being responsible and staying on top of the tax return deadlines, you can make your annual tax experience an easy and straightforward experience.”
2. What do I need to prepare for my tax return?
Spending the time upfront to prepare the documents and paperwork you need to lodge your tax return can help to make the process simple and stress-free.
Generally, you will need to prepare your personal information, income details and expenses for the last financial year. You may be able to access some documents from the ATO, such as Income Statements.
Below is a checklist you can use as a guide to help you prepare before sitting down to lodge your tax return.
- Tax File Number (TFN)
- Bank details
- Medicare and Private Health Insurance details
- Details about your spouse and/or children
- Income Tax Assessment from last year
- Income Statements for any jobs you’ve had over the last financial year
- Bank statements where you have received bank interest paid into your account
- Information on any lump sum payments you may have received or made
- Information for any Pensions or Government payments you may have received
- Statements for any dividends received or invested
- Statements for any other income you’ve received (e.g. rental properties, foreign income, business, employee share schemes)
- Work-related expenses (e.g. mileage, uniform, self-education, union fees and industry subscriptions or membership fees, home office costs)
- Investment expenses (e.g. bank fees, financial advisor fees)
- Costs for managing tax affairs (e.g. tax agents)
- Rental property expenses
- Charitable donations over $2
This is a general guide to help you get started with your tax return. Depending on your circumstances, there may also be some industry-specific details that you will need to account for when preparing your tax return. You can view more information from H&R Block here or check with the ATO for more details.
3. Can I do my taxes by myself?
According to H&R Block, approximately 70% of Australians use a tax agent to lodge their tax return. For some, having a professional tax agent or accountant manage their tax return offers a stress-free solution with the added peace of mind that the process can be done quickly and accurately. This can also come in handy if you have a complex tax return, such as having multiple sources of income.
Organisations like H&R Block offer the ability to complete your tax return yourself through their online platform. This includes additional support from a registered tax agent who can review your tax return for accuracy prior to lodgement, with packages starting from $0 for a basic tax return.
You can also opt to lodge your tax return yourself through the ATO’s myTax online tool, which has most of your information pre-filled for you to review. This is a free and easy option if you have a basic tax return.
There are various ways you can lodge your tax return depending on what is most suitable and convenient for you.
4. What kind of work-related expenses can I claim?
When lodging your tax return, you are entitled to claim expenses related to your work. These may include any of the following:
- Vehicle if you use your personal vehicle for work, such as travelling between workplace sites or business meetings. This can include tolls and parking, although this doesn’t apply to your regular commute. You will need to provide a record of your expenses and can make this claim as cents per kilometre or with a logbook. H&R Block breaks down how you can claim vehicle expenses here.
- Travel (other) if you are required to travel overnight for work purposes and incur costs for meals, accommodation or incidentals, and are not reimbursed by your employer.
- Clothing and laundry if you incur costs for the purchase or laundry of clothing specific to your job, such as chef’s pants or a uniform. This must be specific to your occupation and cannot be clothes you wear outside of work. Some examples include protective clothing and footwear, such as hi-vis vests and steel-capped boots.
- Home office for expenses you may have incurred for your work from home set-up. There are specific factors that need to be considered when claiming home office expenses, and it is important to ensure you stay within the requirements to avoid being penalised. H&R Block have outlined methods and calculations you can use to claim work from home expenses here.
- Mobile phone for the percentage of your mobile phone use (calls and data) that relates to work purposes. See a breakdown of how to calculate and claim work-related use of mobile phones and other devices here.
- Professional registrations and fees if your work requires you to be a member of an association (e.g. trade unions) or you have subscriptions related to your line of work (e.g. financial publications if you are an investor).
- Self-education if you incur costs for a course related to improving the skills and knowledge you need to do your current job. This can also include expenses relating to equipment, home office running costs, internet use, stationery, textbooks and travel to your place of education. View a detailed list of self-education expenses here.
- Tools and equipment for the cost of purchasing any tools and equipment you need to do your work.
Tip: When claiming deductions as part of your tax return, you will need to ensure you provide proof of your expenses. These include receipts, invoices, bank statements or other record-keeping methods that clearly demonstrate the nature of the expense was work-related and is a cost you have incurred yourself.
To help you keep track of your receipts, H&R Block have a free receipt management app available for all users that can be downloaded from Google Play & App Store. Find out more here.
5. What type of expenses can I claim based on my job?
There are some expenses you may be able to claim that are specific to your job and industry. Knowing what these are can help you maximise your tax refund and save in the long run.
Below are some examples of industry-specific items that you may be able to claim as a deduction when lodging your tax return.
Construction and trade
- Tools or other work-related equipment
- The purchase and maintenance of a uniform that has your company’s logo
- Protective gear e.g. helmet, safety goggles, sunscreen and sunglasses if you work outdoors
- Fees relating to trade unions, professional licences or registrations, subscriptions and self-education courses.
View H&R Block’s Construction Worker Tax Deduction Checklist for more information here.
- Uniform and other protective clothing e.g. laboratory coat, non-slip shoes
- Costs relating to conferences (including attendance, travel, meals and accommodation), professional subscriptions or trade unions
- Meals purchased when you are required to work overtime
- Costs incurred for the work-related use of your personal car e.g. travel between patient homes or medical facilities.
View H&R Block’s Medical Professional Tax Return and Deduction Checklist for more information here.
- The purchase and cleaning of a compulsory uniform registered with AusIndustry
- Costs for work-related courses e.g. First Aid or management training
- Home office expenses incurred for time spent working from home e.g. preparing staff rosters
- Costs incurred for travel between one work location to another e.g. different stores.
You can find many more examples and information for industry-specific tax deductions on the H&R Block website here.
Remember to have records of the items you are claiming as proof of your expenses. These Include receipts, invoices or your clearly identifiable line items on your bank statements.
6. How can I maximise my tax return?
Who doesn’t love having a little extra money in their pocket? When it comes to tax time, there are things you can do to maximise your tax return and, potentially, help yourself pay less tax and get more back in your tax refund!
According to H&R Block, you may be able to maximise your tax return by doing things like making a donation, claiming anything (and everything!) you’re entitled to, and timing your expenses.
- Make a donation
Donations over $2 to a registered charity are tax-deductible, meaning you can claim a portion of this when lodging your tax return. So you can enjoy the feeling of doing good and giving back to the community in support of a cause or charity that means a lot to you, while being able to claim your donation at financial year end.
- Claim what you’re entitled to
This is where it can help to be organised throughout the year and keep track of whenever and wherever you incur a work-related expense, so you can have all the records and paperwork ready when it comes to tax time.
If you haven’t done this throughout the year, that shouldn’t stop you! Think of all the expenses you have incurred for work, such as use of your car or working from home, and check to see if you have kept any receipts or can verify your purchase through your bank statements.
H&R Block has a free Spend Tracker within their MoneyHub platform that allows you to link your bank accounts, view your transactions and easily flag any you believe are tax deductible. One you’re ready, simply export this list and send it to your tax agent! Find out more here.
- Time your expenses
Because the end of the financial year in Australia is June 30, you can make any tax-deductible purchases before the end of June and claim them in your tax return from July 1. This means you can purchase and claim any work-related expenses almost instantly, instead of waiting a whole year, unless of course there are purchases throughout the year that are out of your control.
If you own or run a small business, one of the best tax breaks is ”temporary full expensing” of capital assets. This allows you to buy items of capital equipment and then immediately write off the cost against current year profits. You can find out more information here.
And if you have any work-related expenses you'd like to purchase and claim as part of your upcoming tax return, but are still waiting for payday, you can Cash Out with Beforepay to make your purchase. For just a fixed 5% transaction fee you can unlock fast access to funds so you can take advantage of EOFY deals now and enjoy peace of mind later, knowing you can claim your expenses and have your repayments automatically sorted for you. Find out more or Cash Out now with Pay On Demand ™ here.
Tip: These are handy tips to know for when you lodge your tax return this year, but also to keep in mind for the year ahead. Being aware of these tips now gives you a runway to start the next financial year on the right foot, with the whole year ahead to make little changes that can make a big difference the next time you lodge your tax return!
7. How long do I have to wait to get my tax refund?
Tax returns lodged online will usually be processed quicker than paper tax returns. According to the ATO, you can expect your tax return and tax refund (if eligible) within two weeks of lodging online, whereas paper tax returns can take up to 10 weeks.
Your return may take longer to process if manual checks are required. Checking all your details are correct before lodging your tax return and expenses accounted for can help ensure your tax return process is smooth and avoid any delays.
Tax time can sound like a scary, stressful or overwhelming process, but it doesn’t have to be! All it takes is a little investment of time upfront to get your paperwork in order so the process becomes simple and straightforward when it comes time to lodge your tax return.
Remember to be mindful of all the work-related expenses you can claim, and the benefits of things like tax-deductible donations and timing your expenses, so you can maximise your tax return and claim what you’re entitled to.
And if you need help with lodging your tax return, tax professionals like H&R Block live and breathe tax every day and can help take the stress out of tax time. Find out how H&R Block can help you with your tax return here.
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