By Clare BruceWednesday 28 Jun 2017
It’s definitely tax time – the ‘EOFY’ sales have finished and the financial year clock has well and truly ticked over to July so, here’s a some timely tips to help you lodge that tax return.
The Australian Taxation Office’s assistant commissioner Kath Anderson has 10 steps you can take now, to make the job less daunting.
1 – Lodge Any Overdue Tax Returns
Even if you’ve neglected your tax returns a few years’ running, it’s never too late to lodge old overdue returns. In fact it’s mandatory.
“It’s not OK not to lodge, everyone needs to pay their fair share,” said Kath. “And we can tell who has and hasn’t lodged.”
On the MyTax website, you can lodge the last three years’ worth of returns yourself. Otherwise, get help from a tax agent. The sooner you do it, the less likely you will be penalised.
2 – Get Your Records Ready
Work out what income sources you will need to declare, including salary and wages, income from shares, and capital gains from things like real estate. Get your receipts together for work expenses, as well as log books and charity donation receipts.
3 – Use ATO Calculators to Work Out Expenses Correctly
To work out expenses that might be a little more complicated, like laundering of uniforms and home-office items, use the tools and calculators on the ATO website.
4 – Make Sure Your Claims are Allowed
When you’re claiming expenses, make sure they are allowed, to avoid penalties from the ATO.
“There’s three golden rules that apply to anyone claiming a deduction,” said Kath. “The first is that you have to have spent the money and not have been reimbursed for it; the second is that it’s got to relate to earning your income and not be private, and the third is that you need a record (a receipt).”
5 – Decide How You’ll Lodge Your Tax Return
If your expenses and assets are relatively simple, you may find it easy to lodge your tax return yourself. To do so, use the MyTax website. If you’re using a tax accountant, make sure they’re registered.
6 – Decide When You’ll Lodge
While many people like to lodge early to try and get their tax refund back as soon as possible, there can be a downside: “People who lodge early often tend to miss some information,” says Kath.
If you’re self-preparing, the ATO advises you wait until mid-August before you lodge your return. By then the ATO will have a lot of your income information already which will make the process simpler.
7 – Check if There’s Deductable Items You’ve Forgotten
While most people are familiar with claiming deductions for charity donations and work uniforms, there are also lesser-known items you can claim.
These include things like:
- income protection insurance
- mobile phone costs on work calls
- instant asset writeoffs for small businesses
- stationery bought for work but not reimbursed by your employer.
The three golden rules still apply: you must have paid for the item, it needs to be only for work, and you need to be able to prove it with records or receipts.
“Remember we’ll look at it if it’s out of the ordinary,” said Kath. “One tax payer once asked his family and friends to keep their receipts and give them to him; but he was missing the first golden rule in that he hadn’t actually paid for it himself. And we might also check with your employer, just to see that you did need to incur those costs.
8 – Use MyDeductions to Get Ahead for Next Year
If you want tax time to be even easier next year, Kath recommends you use the MyDeductions app to record your expenses throughout the year. It saves fishing around for nine-month-old crumpled receipts under the car seat come July.
9 – Put Money Aside Year-Round to Avoid a Tax Bill Sting
If you’re earning income from things like shares, it’s a good idea to put some money aside throughout the year. That way, if you get a tax bill, it won’t come as a shock.
10 – Decide How to Spend Your Refund!
This is the fun part: if you’re likely to get a tax refund, decide how you’ll use the money. It might be a great chance for a new wardrobe or a holiday, or help you pay off some debts, but you might also be able to spend it on some new equipment for work, that you can claim on next year’s return.
For help with your tax return, call the ATO on 132 861.
This article was originally published on Hope1032.com.au