Get the Tax Return You Deserve - Kaboodle Finance
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Get the Tax Return You Deserve

March 28, 2018

Everyone wants an income tax return they can guffaw over, but very few people know how to get the most out of their tax return. Our quick guide below could make your next tax return (relatively) painless and fatten up your return nicely.

 

Claim Everything You Legitimately Can

Any expense you incurred in earning your income can be claimed as a deduction. As long as you have the paperwork to back you up, claim everything you possibly can. Amongst the common deductions you can claim are:

  • costs of using your own car for visiting clients, driving between worksites and delivering goods – sadly, this doesn’t include driving to and from work
  • if your employer requires you to travel for work, you can claim costs for food and accommodation
  • anything you buy so you can do your job – whether it’s the cost of tools or the cost of a new computer, laptop or mobile phone, if you spend it and it’s used for work purposes, you can claim it

Items costing $300 or less are deductible in full, immediately. Items costing more than $300 are deductible over several years. Good tax accountants can help you determine exactly what you can and can’t claim so that you don’t miss out.

 

Don’t Exaggerate

Don’t inflate your deductions to try and get a bigger refund – you can only claim for what you’ve spent, and that means what you can prove you have spent. You’ll need an invoice, receipt or bank statement to back up each deduction. Self-lodgers using the ATO’s myTax program are monitored as they prepare their return by the ATO’s computer systems to ensure they’re not over-claiming.

The ATO will compare your claims to those like yours and if your claim rings alarm bells, myTax will give you a stern warning inviting you to rethink that deduction.  Ignore that message, and you could be audited.

 

Don’t Be Lazy with Your Form

The ATO’s systems are full of information and forms can be auto-filled online with the tap of a laptop key. Don’t merely rely on this, use it as a tool to save time and still carefully check the data is complete and correct. Particularly if you are lodging early, always use your own information as the key source data, such as pay summaries.

 

Many third parties, such as banks, pass information about you to the ATO late in July or even into August, so early lodgers will often find lots of data missing from their pre-fill. Just because the information comes from the ATO doesn’t mean it’s always correct. In fact, that’s a dangerous assumption. If you omit income and get questioned by the ATO, the legal burden will be on you, even though you’ve taken the information straight from the ATO’s pre-filled data.

 

Remember the Basics

Lots of tax returns get held up by the ATO because taxpayers have made basic mistakes. Watch out for common mistakes:

 

  • If your name or address has changed, tell the ATO before you lodge your return. If you lodge under different details, the ATO won’t be able to match it with your Tax File Number and your return will be delayed.
  • Tax refund cheques are a thing of the past, so don’t forget to hand over your bank details. No bank details, no refund.
  • Check for spelling mistakes. It seems silly, but if you’ve added an extra letter to a key field such as your name, that slip of the keyboard could consign your return to a black-hole whilst the ATO tries to manually match your details.

 

Seek Help

Tax is complicated and the consequences for a botched tax return range from a low refund or ATO penalties to a full audit. That why most Australians use a tax agent or financial advisor to help them. While it’s true the fee you pay may cut into your effective tax return, it is well worth it for the savings in time and stress.

Besides, an experienced agent will usually be good at sniffing out those obscure tax deductions you didn’t know you could claim so they can often pay for themselves several times over.  Not to mention, the tax agent’s fee is itself tax deductible.

For more information, contact Kaboodle Finance on 1800 KABOODLE today.