As we roll through yet another tax year, the time to get started on those niggling tax returns has begun. Ideally, all that effort will be rewarded with a nice little sum. But only if you remember to claim the expenses you're entitled to.
Many of us less-savvy taxpayers start to realise our expense-tracking throughout the financial year has been, ahem, less than excellent and a lot of work will need to go into figuring out how much we can legally claim back from the Australian Tax Office (ATO).
With a Federal election race on, your taxes are going to be a key battleground over the next few weeks. Thanks to the recent Federal Budget, we already have a fairly clear picture of the goodies on offer and some of them are essentially locked and loaded into the system regardless of who wins the election. So, here are some top tips for taking advantage of the tax breaks already announced.
When this happens, it feels easier to just forego claiming those extra deductions you're probably entitled to but never got around to actually calculating. However, with a little forward thinking and record-keeping, you can save yourself hundreds of dollars each year during your tax return.
To help you out, eTax has offered some commonly forgotten deductions many of you might actually be eligible for next tax year. So, whip out those dusty journals and start writing everything down.
First up, tax agents
Tax agents are an extra expense at tax time and while it will eat into your precious returns, it's an expense you can claim back the following year. What's also great about using them is they're the experts in the field and can offer advice about other areas you could potentially be missing out on.
To do so, you'll just need to find the section titled "Cost of Managing Tax Affairs" and pop in the amount you paid for your tax agent. Just remember to keep records of their service and cost in case the ATO want to double check your claim.
Mobile phone bills
Most, who aren't lucky enough to be given a work phone, will use their mobile phone at some stage for work-related purposes. While keeping note of every time you use your personal phone for work reasons is arduous and unrealistic, eTax recommends you keep a journal for one month and calculate the cost across a year.
For example, if you estimate around 20 per cent of your data and call credit usage is work-related across one month, you can claim 20 per cent of monthly bill and then multiply it by 12 months.
See? Not so hard after all.
Working from home
If you have to work at home sometimes, did you know you can claim that on tax too? You'll need to factor in a few calculations for this one to work like the costs associated with using a personal computer but if you keep note of the when and what you're using at the time, it can be reasonably straight forward.
As for the associated electricity costs, the ATO recommends using a fixed rate of 45 cents per hour for heating, cooling and lighting usage.
Depending on the nature of your work, you might need to use your own car for transportation during work hours. Sadly, you cannot claim this for any travel from your home and your workplace but if you're needing to travel between offices or to visit certain sites during work hours, you just may be able to land that sweet tax deduction.
To make things a bit less daunting, the ATO provides a handy calculator to add up what you can actually claim.
Finally, if you're a member of any professional association or union related to your field of work, you might be able to claim a deduction. The rules on this are quite specific so you'll want to read up about it to make sure you get your share.
While there are many myths out there about what you can safely claim without any evidence, it's important to remember your meticulous record-keeping is what's going to stop you living off borrowed tax money. The last thing you want to deal with is the tax man knocking at your door with a handful of questions about any shady returns.