7 Simple Ways You Can Increase Your Tax Return This Year
Nobody likes seeing their taxes disappear out of a payslip week after week. Thankfully, there’s one time of year where you can claim your deductions and hopefully get some of that money back. But that doesn’t mean it’s not a hassle…
Every year you have to unearth all the documents, figure out whether you owe anything and what you can claim, then lodge everything with the Australian Taxation Office (ATO). Even if you feel like you’re doing everything right, there’s usually something you’re missing that could make your taxes decrease and your return increase. So if you need some tax tips, here are 7 simple ways to maximise your tax return this year.
Overview:
- Manage your receipts
- Stay organised year round
- Get the basics right
- Keep a mileage log
- Find all the claims
- Track those donations
- Seek the advice of a professional (or at least consider software)
1. Manage your receipts
One of the simplest ways to maximise your tax return is to keep track of your receipts. That way when it comes time to make your deductions you can easily show evidence. For example, any time you cover a work-related expense or make a purchase that you need for work, you need to keep track of it. Does your office take care of all your supplies or do you provide some?
If you provide anything from pens to a coffee machine, make note of it. In addition, you’ll need receipts when you are showing a donation made, membership fees paid, home internet costs and even the bill for hiring a tax professional to make sure you don’t make any tax deductions mistakes. All of these are part of deductions you could be missing out on if you don’t keep track of your receipts.
You might be wondering, “What can I claim on tax without receipts?” Well, don’t worry, you can still claim up to $300 of work-related expenses without a receipt. But if you want to claim more, make sure you start collecting!
2. Stay organised year round
Instead of running around at the end of the year trying to find receipts, make sure you have a designated spot to keep receipts and a digital folder where you can scan and save all your receipts in one spot. Another easy way to get organised is to download an app that logs and keeps track of receipts.
The ability to take a quick picture of the receipt as soon as you make the purchase or finish an online transaction will help you find them, come tax time. One such app is Etax, which is easily downloaded for both iPhones and Androids. The app allows you to categorise, record and add notes. Plus, it’s all in one spot to help during tax time and is a great way to maximise your tax return.
3. Get the basics right
This may be obvious to some but make sure you are checking all your basic information. Simply by checking over your details could make the process quicker and maximise your tax return. Sometimes you can have a blind spot if you are not fully paying attention to the basics of filling out the details for the ATO form. The basics include:
- Get your details up to date with the ATO
- Double check your bank details are correct so your funds reach the right account
- Making sure you spell everything correctly in all areas of the form
- If your address doesn’t match between the ATO and your tax number, it won’t be directed to you
4. Keep a mileage log
Another simple way to increase your tax return is to keep a mileage log. Lots of people understand that you can claim mileage on your car, as long as you don’t already get reimbursed at work. You can even use this handy ATO calculator to get an estimate of how much you can claim. However, you might miss some of the other expenses that also are tax-deductible, such as the depreciation of the car, registration, insurance and cost of keeping it running including fuel, oil changes and other services.
But in order to take all these deductions as well as mileage, you’ll need records to back up what you claim. Keeping an extremely detailed logbook is the best way to get “mileage” out of your miles. If you’re doing it correctly, it’s an easy way to maximise your tax return.
5. Find all the claims
People miss opportunities all the time to claim deductions. For example, most people know about education deductions, but what about theatre and film tickets for an actor?
And don’t forget about the deductions for working from home. You can claim office equipment and furniture up to $300, and depreciation of value for anything costing more than that. And that’s before you get into a portion of monthly bills like phone, electricity, and internet. Generally, you can’t claim occupancy expenses like mortgage interest, rent or home insurance. However, there are some limited circumstances where you can, so check your eligibility before you submit your claim.
6. Track those donations
Another simple way to increase your tax return is to keep track of your donations. You can claim amounts over $2, as long as you didn’t get anything in return like a chocolate or other gift. Even if you’ve thrown some change into a donation bucket or two throughout the year, you can claim up to $10 for them without a receipt!
If you’re donating larger amounts, make sure you get a receipt or letter noting your donation amount and where you donated. It might be a good idea to check into whether the charity has Deductible Gift Recipient status and, most importantly, if you received any benefits from the donation. The following charity-related purchases do not count for donations:
- Raffle tickets
- Purchasing tickets for fundraisers
- Buying items sold as a fundraiser
- Membership fees
- Winning and paying for auction items at a charitable event.
There could be even more, so it’s best to check before you try to claim it as a donation.
7. Seek the advice of a professional (or at least consider software)
The last piece of advice will help you more than anything else — consider using a professional, or at least tax software. The accountant or accounting software knows the right things to ask for, where to look for additional deductions, how to handle any tricky tax issues you might have and how to plan for the coming years.
Seeking the help of a professional will allow you to just turn over all those receipts, paperwork and records you keep and let their experience guide you in the best way to complete your taxes. Trained professionals know how to expand the claims and help you maximise your tax return for the year. And don’t forget the peace of mind knowing it’s all been taken care of!
Hopefully, following tips like the above and seeking professional advice might save you from any surprises and perhaps even give you a bit of a larger tax refund. Happy claiming!
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