How to start preparing to lodge your tax return

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Lodging your tax return is generally a straightforward process, but it can be easy to feel flustered if you’re not prepared when tax time comes around.

To help you feel confident with lodging your tax return this year, here are some things you could do to start preparing now and save you time come July 1. 

1. Get up to date with tax return changes 

Did you know the Australian Taxation Office (ATO) made changes to how you can claim your working from home expenses? 

Announced in February 2023, the change proposes a revised fixed rate method for claiming any costs incurred when working from home. The revised fixed rate method has increased the cents per work hour that you can claim from 52 cents to 67 cents. 

This means you can claim 67 cents per hour that you work from home. However, this now includes expenses for: 

  • data and internet 
  • mobile and home phone use 
  • electricity and gas 
  • computer consumables 
  • stationery. 

Prior to the change you were able to claim a separate deduction for these expenses. With the change, you are no longer able to do this. 

The revised fixed rate method applies to deductions from 1 July 2022, for 2022-2023 income tax returns. So if you were working from home regularly in the last income year, this might apply to you. 

For help with calculating your working from home expenses you can view the ATO fact sheet here

2. Compile your working from home hours 

To make any working from home deductions when you lodge your tax return, you will need to ensure you have a record of your hours worked from home.

Since life can get busy, you might have your hours logged in separate places depending on what was convenient for you at the time e.g. your calendar, a document, a different spreadsheet, your phone.

You can use the time now to tidy up your record keeping so that: 

  1. You can easily provide the ATO with a record of your hours worked from home, and 
  2. You can quickly and accurately calculate the working from home deductions you can claim when you lodge your tax return. 

3. Gather your paperwork 

If you lodge your tax return online with myTax, the ATO may have your details on file, but it’s always good to check your records and confirm all your information is correct.

Some of this information may not be available until July, but getting a headstart and gathering this information now could help you save on time (and stress!) later. 

Personal information

  • Tax File Number (TFN)  
  • Bank details (BSB and account number)
  • Medicare and Private Health Insurance (if applicable)
  • Spouse’s income (if applicable).

Income information

  • Income tax assessment from previous year 
  • Income statements/payment summaries from all employers for the last income year
  • Bank statements for accounts where you’ve received any bank interest
  • Statements for any dividends received or invested
  • Lump sum payments you may have received or made
  • Pensions or Government payments you may have received 
  • Statements for any other sources of income (e.g. rental, foreign income, business).

4. Prepare your expenses 

Consider taking some time to think about: 

  1. What you want to claim 
  2. What you can claim 
  3. What proof can you provide for your expenses (e.g. receipts, invoices, bank statements). 

Knowing what expenses you’re entitled to claim, particularly as they relate to your work, could help you get more out of your tax return and, potentially, your tax refund.

Examples of some expenses you may be able to claim include: 

  • Work-related expenses (e.g. vehicle, travel, uniform, self-education) 
  • Charitable donations over $2 
  • Rental property expenses 
  • Costs for managing tax affairs (e.g. tax agents
  • Investment expenses (e.g. bank fees, financial advisor fees).  

You can find out more about what deductions you can claim here

Depending on where you work, you could have industry-specific expenses that you can claim when lodging your tax return. 

For example, if you work in construction and trade you may be able to claim expenses you incurred for the purchase of tools or other work-related equipment, protective gear and fees relating to professional licences. 

If you work in healthcare, you may be able to claim costs relating to your uniform, any conferences you attend (including attendance, travel, meals and accommodation), and meals purchases when you are required to work overtime. 

The ATO has a comprehensive list of occupation and industry specific guides to help you understand what expenses you might be able to claim. You can view the guide here.

Because the deductions you might be eligible to claim span across expenses from July 1 to June 30, it might take time to gather all the information and proof of purchases that you need. To avoid feeling overwhelmed, you could consider allocating a certain amount of time each week to gathering the information and documents you need, rather than doing it all in one go. 

Starting the work to lodge your tax return now can help you take incremental steps towards being ready and prepared for tax season.

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