If the word taxes is enough to make your heart race, you’re not alone. Across the world, people worry about their taxes, from whether they paid enough throughout the year to whether they’ll get any tax return back, having anxiety around tax season is a very normal feeling.
Luckily, taxes don’t have to be scary. In fact, many Australians fail to take advantage of their full range of deductions and that means they’re owed a higher tax return as a result. Who doesn’t love to get their money back from the government? Instead of fearing for the worst, it’s smarter to learn how to file your taxes so you can look forward to more money in your own wallet.
You work hard for your money. You deserve as much of it back as possible. Hundreds of dollars every year go to the tax office simply because Aussies fail to claim work-related deductions and make other mistakes. It doesn’t have to be this way. This tax season, take back control of your taxes with these tips below and land your biggest return yet.
1. Use an Agent For Filing a Tax Return
The best way to get the most of your tax return is to simply avoid lodging it by yourself if you don’t have the expertise. While the electronic filing service is simple to use, it doesn’t always take into account your whole situation. It won’t take you through different scenarios. Frankly, it’s not designed to go the extra mile to make sure you’re getting the most back.
Generally, you’ll need to lodge your tax refunds by 31 October and you have two options: use the myTax online service or work with a registered tax agent. Tax agents also have special lodgment schedules so they’re able to work on returns past the 31 October deadline, so this is an added benefit. If you’re worried about not getting the most out of your taxes, meet with a qualified tax agent who can do the heavy lifting for you.
2. Keep Clear Records
Another smart tip to maximize your return is to simply keep clear records. This might sound like common sense, but it’s harder than you think to keep accurate track of just what you’re spending work-related money on throughout the financial year.
You need not only a record of any payments you’ve made for work-related expenses but also a way to track receipts. A record-keeping app or software might be a good option, but you can also just use an old-fashioned spreadsheet and binder. If you’re working with a financial professional throughout the year, they can also help you prepare for your tax return.
3. Track Your Car Expenses
One of the biggest ways to deduct more from your taxes is through car expenses. It’s easy to overlook the mileage on your vehicle, but it adds up quickly. However, don’t think you can just start deducting every kilometer you drive on your commute to and from work. There are rules and regulations about what does and doesn’t count as a vehicle expense.
Basically, you’re allowed to count any expenses related to work. This does not include your commute. There are a few different ways to calculate your expenses:
- Cents per Kilometer – You can claim up to 5,000km per year without keeping a log book, however, the ATO can ask you to provide documentation so it’s smart to use a kilometer tracking app. You’re allowed to claim 66c per work-related kilometer.
- Car Logbook – You’ll need to record all business trips and personal trips in your car logbook for 12 continuous weeks and you’ll also need to own the car yourself. Keep receipts for expenses related to the car including insurance, petrol, registration, and more.
4. Deduct Your Home Office
Do you use a home office? If you do a significant portion of your work in a dedicated home office, you’re able to claim 45c per hour towards running costs. If you have already established and recorded a clear pattern of use with your home office, you can claim the actual cost. However, make sure your office is used exclusively for work-related activities.
5. Deduct Your Business Travel Expenses
Do you travel for your work or business? If so, you’re able to deduct a large portion of these expenses. As with all other deductions, it’s important to keep clear records including dates, places traveled, and expense receipts.
Travel expenses include things like flights, accommodations, food and more. Note that if you receive a travel allowance from your employer, this income also needs to be claimed on your tax return.
6. Don’t Forget Your Agent Fee
Finally, if you use a tax agent to prepare your taxes, don’t forget you can deduct this fee as well. You can deduct the fee you paid last year towards this year’s taxes, so that’s a much-welcome financial relief. This is yet another reason to consider using a qualified agent to file your taxes. It pays to be prepared!
You can overcome any anxiety about taxes. It’s important to be prepared and know your deductions so you’ll be in a good position to maximise your tax return. Hundred of dollars go unclaimed each year. Don’t lose your hard earned money just and make sure you’re aware of your potential deductions.
If you want extra help ensuring your taxes are prepared to maximise your savings, work with a qualified financial expert. Debt Busters has over a decade of experience helping Australians get the most out of tax season without the worry. Contact our financial experts today to take the first step in building a brighter financial future.