The end of the financial year is a busy time for Australians. Some find it easy, while others say it gets a little complicated for them. Despite the difference in how people may view lodging tax returns, many of us search for tactics (legal, of course) to boost our tax refunds.
We want to pay no more than what we owe, but at the same time, find ways to maximise our tax return this financial year. Thankfully, there are tried and true methods that will help cut your tax liability, which the ATO approves of. Here they are:
Claim Your Work from Home Expenses
It’s not surprising that there is a considerable increase in the number of work-from-home employees over the past year. If you are among them and you are new to this setup, it is understandable that you may not be aware of the work-from-home expenses that you can claim. Just like when you were working in an office, it’s crucial that you do things right, especially with your tax return.
There is a long list of what you can and cannot claim if you’re working from home. And it can get overwhelming for some people. To simplify this information for you, remember that you can claim anything that directly affects how you earn your income. Make sure that you have records to prove the claim, as well. With these things in mind, it’s important to know that you can claim the following if you have a distinct workspace, which is separated from the rest of the household:
- Heating and cooling bills
- Lighting bills
- Cleaning, repair, and maintenance of the area
- Home office fittings and furniture
- Purchase and repair of computers and other related office equipment
- Stationery, papers, printer ink, and other computer consumables
- Internet and phone expenses
Note that computers and other equipment, as well as furniture purchases, are calculated based on their depreciation costs. Buying capital items worth $300 or less can be written off immediately without being depreciated.
Claim Other Work-Related Expenses
If you pay for your vehicle and travel expenses, whether you go to your office through your personal car or ridesharing, you may be able to claim a deduction for them. There are, of course, specific limitations to these deductions. For example, driving from home to office and vice versa cannot be claimed. However, you can claim a deduction if you drive or take public transport from one job to another.
Other expenses you may be able to claim for are:
- Clothing and laundry expenses of uniforms that are distinct to your job and company
- Protective clothing and certain accessories for specific employees
- Self-education expenses, including home office costs
- Tools and equipment purchase and other related expenses
- Fees of books and periodicals, as well as digital information and subscriptions
Once again, you can only claim a deduction for the mentioned expenses if they are related to your job. A course that helps you be better for your current duties can be claimed. However, one that may aid you in getting a promotion or another job cannot be claimed.
Another thing to note, though, is that you cannot claim the first $250 that you paid for the course.
Get Your Donation Back
If you donate, you can get the money back. For example, if you made a bucket donation where you put money in a donation box or bucket, you can get up to $10 of your money back. You do not need to show a receipt for the good deed. It’s an added bonus that you may not even be aware of during tax time.
However, not all donations are entitled to a tax deduction. If you have donated or sent a gift, make sure that it meets the following conditions:
- It’s a voluntary transfer, whether in the form of a monetary amount or an item.
- You should not get anything in return, including a material gain, advantage, or other favours
- The donation should be money, property, or financial assets like shares
- You must have proof of the contribution, such as a receipt
- Any gift should at least be over $2 in value
You may also need to comply with certain gift conditions when donating to a charitable organisation. Be sure to know about these prerequisites if you would like to claim a deduction come tax time.
Get Extra Refund for Your Side Hustle
A few years back, Aussies were not required to declare their side hustle. So, whether you worked as an Uber driver part-time or have an Airbnb property, you were able to keep all your earnings without paying taxes. Unfortunately, the ATO has become stricter and now wants to get all your details. And that includes your participation in the gig economy.
But don’t worry; you can actually claim some benefits for your side hustle. Some of the expenses are deductible, as long as they are incurred as you earn your income. For example, vehicle, home office, and financing costs can be deducted from your tax liability. If you drive people around, you can claim a deduction for using the vehicle while you work. You will need to have a record of the expenses and your work time, however.
Not everything has to be in your tax return. You can keep your income from other activities you have, such as hobbies that do not intend to make a profit. For example, you bake cakes, and someone bought a few. You also do not need to declare your earnings for selling an old bicycle on online platforms.
Remember that timing can boost your tax return. And here at TaxReturn.com.au, we can help simplify the process for you. Get your biggest tax refund with the assistance of our friendly staff. Contact us today!