1. Find a trusted accountant
A qualified accountant can help maximise your tax return as they know all the ins and outs and won’t leave any stone unturned. They can make suggestions on deductions that you may not have been aware you were eligible for, or that you might have otherwise missed. The fee you pay for an accountant’s service is tax deductible.
2. Organise your receipts
- A copy of the previous year’s tax return.
- Records of any sales or purchases of shares, business or property.
- Private health insurance details.
- Your spouse’s details (if applicable).
- A list of all your income, including payment summaries, rental income, interest and dividends and any foreign income.
- A list of all your claimable expenses, including work-related expenses, donations, self-education expenses and accountant fees.
It’s time to sort out your receipts so you can make your tax deductions. These days, many major retailers offer digital receipts so if you have lost the original, contact them as they may be able to retrieve a digital copy for you.
Tip for the small business owners: As a small business owner, many expenses incurred in running your business can be claimed as a deduction (that’s a win). Deductions could include equipment, legal advice, rent and many more.
3. Have you been working from home during COVID-19?
As the COVID-19 pandemic and lockdowns continue, many individuals have continued to work from home. As a result of the change to your working arrangements you may have incurred expenses, some of which you can claim at tax time. If you work from home, you may be able to claim a deduction for the additional running expenses you incur including1:
- electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 or decline in value for items over $300.
If you are working from home only due to COVID-19, you can't claim occupancy expenses such as mortgage interest, rent and rates. You also can’t claim the cost of coffee, tea, milk and other general household items your employer may otherwise have provided you with at work. For the latest and most up to date information on working from home including calculating additional running expenses, visit ATO.gov.au
4. Know what you can claim tax deductions on
Knowing what you can claim can be quite tricky and will differ according to industry and your role. It's important that you take time to look over what you can and can’t receive tax deductions on. You can find out via the Australian Taxation Office (ATO) and your accountant can help you out to make sure you’re not missing out on anything you might have overlooked.
5. Look out for scams
There’s no shortage of scams around tax time so be vigilant and always verify the source if you receive anything you’re unsure of. Examples of scams include emails purportedly from the ATO asking you to complete a tax refund review. Scam emails typically include poor grammar, a false email address, and they do not specifically address the sender. You can always verify the legitimacy of emails by contacting the ATO and always look for an @ato.gov.au account.
6. Embrace your charitable side
If you’ve been donating regularly to charity or would like to make a one-off gift to an organisation you support, you can claim a tax deduction. Donations over $2 are tax deductible so this means you can do some good and help reduce your tax.
7. Contribute to super
The end of the financial year is a great time to boost your super account. If you have any additional savings, putting this towards your super offers a number of tax benefits. If your spouse or de facto partner is unemployed or earning low income (under $13,800 p.a.), you can make a super contribution on their behalf and you could qualify for a tax offset.
8. Make the most of your investment property
As a property investor, you should be sorting out your paperwork so you can make the most of the deductions available to you. Gather all receipts for common expenses such as advertising for tenants, cleaning costs, council and water rates, and electricity and gas. If your property requires some repairs or renovations, now’s the time to have these done as they are tax deductible. You should also spend time reviewing what costs you need to keep or cut. For more information on what you can claim read more at ATO.gov.au.
9. Insurance for small business owners
For the small business owners, something else to remember is to check that your insurances are up to date, especially if your circumstances have changed in the last year. Anything from renovating your premises, buying new equipment and adding more staff could mean you are not fully covered under your current insurance policy.
The end of the financial year is a busy period but by preparing early you can minimise the stress and potentially nab some extra cash in your pocket.
If you have any questions about your financial situation, how you can achieve your goals or protect your family, speak to your local FinChoice expert, today.
1. Source: ATO.gov.au
Last updated: 3 June 2021