Nobody enjoys it when tax time rolls around. Unfortunately, you can’t get out of it either. Therefore, instead of dreading filing taxes, you can focus on how to maximise your tax refund. We’ll be discussing various tips that help you achieve that. These include:
Working from Home
Many people have been working from home – whether part-time or full-time – since the pandemic emerged. You’ll want to note that if you’re working from home, you can claim at least a part of your home running expenses as a tax deduction. For instance, let’s assume you’ve got a separate home office room. You can claim the lightning, cooling, and heating costs of that room as a tax deduction. In addition, you can also record the depreciation of home office furniture and fittings in your tax filing.
Likewise, you can also do the same with office equipment and computers. You might want to claim a deduction on any computer consumables and stationery you purchase. You can also cover telephone and internet costs as a tax deduction since you’re working from home.
Proof of Purchase
Nobody enjoys keeping receipts as they can be a nightmare to manage, particularly if you’ve got a ton of receipts. However, the reality is that they can significantly help you with your tax returns. If you purchase something for work, you can use these receipts to help you claim a tax deduction.
Deductions for Expenses to Earn
Many people often don’t realise they can claim deductions for the expenses that come from earning their income. If you’re going on field visits or visiting suppliers, you’ll likely need a mode of transportation to get there and back.
Whether you rely on public transport or use your vehicle, you’re likely incurring travel expenses. You can claim tax deductions for these costs. Likewise, most people don’t realise that allowances paid by employers are also taxable. In addition, if your purchase any tools or equipment for work, you can claim a deduction on them.
Don’t Rely on Pre-filled Data from ATO
Many people often rely on pre-filled data from the ATO because it’s convenient. While that might seem ok, the issue is that your data is likely to be incomplete. Most third parties typically don’t provide the ATO with the latest information until July or August. Therefore, if you’re filling out your forms before that period, you’ll want to refrain from using pre-filled data. Also, it’s highly likely that all your expense is not covered and so you will be leaving a lot of money unclaimed which translates to a smaller return for you.
It can often be tempting to try to claim deductions on all the things you possibly can. However, we recommend that you refrain from exaggerating your deductions. You’ll be better off claiming deductions on things you can support with proper documentation. Otherwise, you risk running into trouble with the ATO. The ATO can also impose penalties on you for trying to game the system.
One of the biggest problems many people face is disorganization. When tax time rolls around, they scramble while trying to find their receipts. Doing so can make matters more complicated for you. Hence, we recommend you try to be more organized with your documentation. Allocate some desk space where you can safely file your invoices until it’s time to do your taxes.
Managing your tax returns can be challenging. In addition, taxation laws can often be confusing, particularly if you don’t have an accounting background. In such instances, seeking help can prove beneficial.