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12 August, 2020

Maximising Your Tax Return

One of the easiest ways to boost your tax return is by taking advantage of the deductions you’re able to claim. Here’s our top three tax tips to help you get more money back at tax time.

By Peter McCullagh

1. Claim as many work-related expenses as you can

Many expenses that you accumulate during the year in the course of earning your wage can be claimed in your tax return. However, many cannot, and incorrectly claiming these may result in a penalty from the Australian Taxation Office.

Here’s a few examples that you might be eligible for:

Tools and work-specific clothing.

The item is needed to perform your job for example, tools that tradesmen use, equipment that hairdressers use, special shoes such as steel cap boots.

Courses and conferences.

Self-education expenses such as courses and certificates need to be directly related to your profession and will help you get a promotion or a pay rise.

Laptops and mobile phones

If these are used for work purposes you’re able to claim it on tax (if you have a laptop that you use for work and personal use, you’re only entitled to claim the portion that you use for work).

Safety items.

Item’s needed for self-protection or safety when doing your job for example, sunscreen and sunglasses if you are required to work outside

2. Claim tax deductions for working at home

If you work from home full time, part time or only on the odd occasion, you are eligible to claim this as a tax deduction.

For example, if you’re running a business from home (full-time or part-time) that requires you to use computers, phones and other electronic devices, you could be eligible to claim deductions on certain costs.

This even included the cost of your home internet and electricity bills!

Working from home tax deductions can include the following:

Cleaning costs. The expenses incurred from cleaning office space at home.

Office furniture. Purchase and repair costs for office furniture and fittings required to do your job. Your phone bill. Landline and mobile phone calls related to work matters (you should get an itemised phone bill and highlight the work-related calls)

Your home internet bill. You can claim a portion of your monthly internet bill, in line with how often you use it for work purposes.

Electricity bills. You can also claim a portion of your home electricity bills, in line with how often you work from home.

Amazingly, you can also claim a portion of your occupancy expenses, like rent, mortgage, and home insurance, so long as you operate your business solely from your home and have a dedicated space for business activities.

It’s important you claim working from home expenses correctly, to avoid a penalty from the Australian Taxation Office. You’ll need to show evidence and your calculations to justify how much you’re claiming. A tax agent can do this for you to ensure you’re claiming correctly.

3. Use a registered tax agent (they’ll help maximise your return and their fee is tax deductible!)

For a lot of people, using a tax agent to lodge your tax return is the easiest way to ensure you’re claiming everything that you’re eligible for.

Here’s how tax agents can help you this tax time:

Claim the tax agent fee as a tax deduction. You might be surprised to learn that the cost of using a tax agent is completely tax deductible.

Claim more deductions. Tax agents know the ins and outs of the tax system so they’ll be able to help you claim everything you’re entitled to, even things you might not be aware that you’re entitled to claim.

Claim correctly. If you don’t claim your deductions correctly, you could be hit with a fine from the ATO. Tax agents will help make sure you’ve claimed everything correctly so you can have peace of mind after you lodge your return.

Help with calculations. Claiming things like home office expenses and car use can be really tricky and time consuming. You’ll often need to create a log book, or show your working for figuring out how much you can claim. Tax agents are professionals at this, so it can save you a lot of time and stress.

Offer tax tips. Tax agents can also offer you extra tax tips and tips for organising your finances in general.

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