News flash! The end of the financial year is just around the corner, which means a little extra attention to your finances over the next few months could help you maximize your tax return, or at least lower your tax bill this year.
The good news is getting tax-time ready is a lot easier than it used to be. By using a few simple apps and getting familiar with the basic deduction rules, you’ll significantly reduce the stress (and time) that goes with getting your financial life together.
And if you’re still looking to convince yourself getting started a few months out is the way to go, it’s worth remembering that being proactive about your taxes is good for your wallet, and your mental health – a total win-win!
Research by the Centre for Social Impact estimates two million Australians suffer from severe or high level financial stress, with another ten million saying they have some level of financial worry. If this sounds like you, firstly take comfort you’re one of many, and secondly, understand that you can break the cycle. Who knows, the first baby step to shaking off your money worries for good might be getting your tax affairs in order this year!
To get started, we’ve put together 5 simple things you can do to help make submitting your tax return easier once 1 July rolls around.
Say goodbye to paper receipts and track expenses on the run
The days of storing receipts in shoeboxes is well and truly over. If you have a smartphone and you know how to use an app – which I’m guessing is 99.99% of you – then it’s super easy to download the ATO’s free myDeduction app on to your phone.
When you make a tax-deductible purchase, just enter the details, take a photo of the receipt and save it to your deductions for the year. The best part about the app is you can then automatically upload all the data straight into your tax return or share with your tax agent or accountant.
If you have some receipts stashed away already, set-aside a Sunday morning to upload them over a nice pot of coffee and some croissants. You’ll feel better for it, trust me, and you may even get more excited about starting a proper budget!
Work from home? Then you need to get savvy about these deductible expenses
With more and more of us working from home, getting savvy about what is eligible to claim could be the fast lane to saving on your tax bill. Generally speaking, you can claim for the percentage of time you used each item for work.
Here are some things to start considering:
- equipment or services you use, like desks, chairs and computers
- the cost of using utilities like gas and electricity in the room you work from
- work related phone costs and internet plans
Travel interstate for work? Save those meal receipts!
If your employer requires you to travel for work, and you are away overnight, then expenses you incur as a result are deductible, so long as you haven’t been reimbursed already by your boss. Check out the full list here on the ATO website.
Remember your online news subscriptions, they might just count
If you subscribe to online or offline publications that help you stay up to date in your line of work, and you can show a direct link to the subscription and your assessable income, then it’s highly likely you can claim a deduction. For example, a chef or Maître d’ subscribing to a food magazine, or a writer or journalist subscribing to online news sites would both make the cut. The good news is if the subscription cost you less than $300, you can claim an immediate deduction.
Finally, here’s one for the ladies
For decades men were able to deduct their briefcase as a work-related expense. To address the imbalance, in 2016 the ATO introduced a ruling allowing women to deduct the cost of a work-related handbag, provided it was used to carry documents, phones and computers. So, while that means a YSL clutch might not cut the mustard, a nice sturdy Michael Kors Voyager almost certainly would.
We wish you all the best with this year’s tax return. And remember, if you’re still feeling overwhelmed, tax agents are out there, ready to help. And guess what, their fee is tax deductible next year!
If you receive a tax refund this year, consider putting it towards your outstanding debt. For more help with reducing your debts, give us a call at 1300 368 322. At Debt Busters we’ve been helping Australians out of debt for over 10 years and we can help you too.