As tax time approaches, many Australians are wondering how they can maximise their return amid the cost of living crisis.
From claiming working from home expenses to knowing when the best time is to file your refund, there are a few tips that tax agents use to get the biggest return.
Below is a list on how Australians can make the most of their tax return.
As tax time approaches, many Australians are wondering how they can maximise their return amid the cost of living crisi
DON’T USE THE PRE-FILLED OPTIONS
Tax agents say you are unlikely to get the highest return by relying on the pre-filled data from the Australian Taxation Office (ATO).
Though it might be the quickest way, taxpayers should know that the pre-filled information is not always the most reliable according to H&R Block’s director of tax communications Mark Chapman.
‘During July in particular, many taxpayers are shocked to notice plenty of their income information doesn’t show up when they download data from the ATO,’ he said.
‘This is because many third parties don’t pass on the data they are legally required to provide until well into July and in some cases August.’
Mr Chapman urged Australians to use their own income statements rather than just relying on the ATO’s data, as the legal burden is on the individual to make sure the information is correct.
However, there are also new rules that come with those changes that may catch some people out, according to managing director of Impact Taxation and Financial Services Brenda Ferguson
WORKING FROM HOME
If you spend a lot of time working from home, there are also a number of items you’ll be able to claim, these include phone and internet expenses, stationary, printer paper, ink, and even office furniture.
However, the ATO has changed how people can claim their working from home expenses, which may affect how much you can get back.
For expenses incurred from March 1 this year, you’ll be able to claim 67 cents per hour while working from home, an increase from the standard rate of 52 cents per hour.
However, there are also new rules that come with those changes that may catch some people out, according to managing director of Impact Taxation and Financial Services Brenda Ferguson.
‘The major change is that people actually need to a really detailed daily diary, if they don’t do that, then they won’t be able to use the fixed rate method,’ she said.
The diary must also be kept while the person is working, so you won’t be able to go back and create it at a later date.
However, those who fill out time sheets or have rosters will be able to use those as evidence that they were working from home instead of a diary.
Not only do the new rules change the documentation requirements, they also change what can be claimed on the side.
‘Also the new fixed rate method already includes a mobile phone and internet so on top of that they can’t claim mobile phone and internet consumables,’ Ms Ferguson said.
‘One other thing is, the old method included wear and tear of office furniture, but the new 67 cents per hour method doesn’t include office furniture, so that’s actually a little bit of good news for taxpayers because that means they can claim home office furniture separately on the top.’
For expenses incurred from the end of last year’s tax season until March 1, it will revert to the standard rate of 52 cents per hour.
Though it might be the quickest way, taxpayers should know that the pre-filled information is not always the most reliable according to H&R Block’s director of tax communications Mark Chapman
HOW TO CLAIM YOUR EXPENSES
The tax expert also cautioned people not to inflate their expenses, reminding people that they are only entitled to what they have incurred – if you overdo it, you could get into trouble with the taxman.
‘However, if you actually have incurred a work-related expense, and you have the substantiation to prove it, don’t hesitate to claim it,’ Mr Chapman said.
If you’ve purchased anything for your work or business in the past 12 months, those items may ensure you get the highest return possible.
Things like power or hand tools, computers, phones, and tablets can be claimed, at least in part, if you use them for work.
The whole cost of items under $300 can be claimed for the financial year the item was purchased in, while the depreciation cost of more expensive items can be deducted over several years.
Source: | This article originally belongs to Dailymail.co.uk
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