11 ways to boost your tax refund


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With just a few weeks to go until the end of the tax year, you might think it's too late to knock your taxes for the year into shape.

However, even this close to EOFY, there are still some last-minute planning opportunities to maximise your refund for the year.

So, what should you be doing as we head towards June 30?

tax deductions working from home

1. Running your own business?

If so, look to utilise the "temporary full expensing" measure. This allows you to claim an immediate tax deduction for all capital purchases (irrespective of the cost), rather than depreciating the cost over several years, as used to happen.

This is great for tech items such as computers, tablets and phones, as well as tools and equipment for tradies, office furniture and even motor vehicles.

The allowance is available to all businesses with an aggregated turnover of less than $5 billion.

Remember, as well as making a purchase, the asset you acquire also has to be used or available for use in your business, so realistically you need to get the item delivered and installed by 11:59PM on 30 June. If you buy something now for delivery and/or installation in July, you won't be able to claim the deduction this tax year.

2. Home office

If you are in employment but work from home, either occasionally or all the time, you are entitled to deductions for costs arising from working at home. The expenses that you can claim include:

  • Heating, cooling and lighting
  • Cleaning costs
  • Decline in value (depreciation) of home office furniture and fittings, office equipment and computers (for items over $300)
  • Computer consumables, stationery, telephone and internet costs
  • Items of capital equipment (such as furniture, computers and associated hardware and software) that cost less than $300 can be written off in full immediately

With many retailers running End of Financial Year specials, any purchases you make now can be deducted in this years tax return so from a cash flow point of view, you can minimise the time between purchase and tax deduction!

3. Car expenses

If you use the log-book method, now is the time to check that your log-book is up to date and that you have all the receipts, invoices and records of journeys that you will need to calculate and substantiate your claim.

If you use the cents per kilometre method, you will still need a record of all work-related journeys during the year.

The ATO will be looking particularly closely at car claims this year, with average claims expected to be substantially down due to COVID-19, so it's important that your records are correct and complete.

4. Mobile phone

If you used your personal mobile phone for work purposes, you can claim a deduction for the business-related use.

Make sure you have your phone bills collected together and have kept a log of your business/personal use over a four-week period. That percentage can then be applied to the whole year.

5. Charitable donations

Make a last minute charitable donation. You can claim a deduction for donations of more than $2 to a registered charity provided you have a receipt for the donation.

6. Prepay some expenses

You can claim a tax deduction this year for expenses which wholly or partly relate to next year. So, if you have some spare cash, consider paying things like union fees, professional subscriptions and annual insurance premiums in advance in order to accelerate the deduction.

7. Gather written evidence

Make sure you have written evidence, such as receipts, invoices and bank or credit card statements, for everything you intend to claim.

8. Make a tax deductible super contribution

If you have some spare cash, look at making a personal contribution into your super fund. Provided the total amount of your contributions (including the contributions made on your behalf by your employer) does not exceed $25,000, this can be a great way to boost your retirement savings and claim a tax deduction for the personal contribution.

The payment must be made by June 30 and you need to advise your super fund that you've made the payment by the time you lodge your tax return (your super fund or accountant can give you guidance on how to complete the form and there's a standard form on the ATO website.

9. Buy a new handbag

If you use a bag for work, to carry papers or a laptop perhaps, you can claim a tax deduction for the cost. That could include a briefcase, a backpack or a handbag, whichever suits your needs.

10. Offset capital gains against capital losses

If you've disposed of shares or any other form of investment and you know you've made a capital gain, take a look at your investment portfolio and consider disposing of any assets which you own which you know are sitting at a loss. The resulting capital losses can be offset against the capital gain.

Be careful though if you sell shares sitting at a loss and then buy them back in the new tax year. The ATO takes a hard line against so-called "wash sales". This refers to the sale of an asset before the year end and the purchase of a substantially identical asset immediately after the year end. The ATO regards the purchase and the sale as effectively the same asset and has issued a Tax Ruling which states that they can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties.

11. Seek expert help

A recent study by H&R Block has revealed the majority of Aussies do not consider themselves to be confused about their tax return this year compared to previous years. However, after a year of grappling with the pandemic and seeing new financial trends emerge, Aussies have been presented with new milestones; purchasing a new home or investment property, investing in the share market, investing or trading in cryptocurrencies, launching a new business, pivoting from an existing business model, or being forced into early retirement, all of which have major tax implications.

When facing these new milestones, many don't have the resources for making the jump nor are they equipped for the tax changes and associated costs and benefits, and could risk being audited by the ATO

Australians who have done well on the share market, with property or even with Bitcoin during the past year face being audited if they get their returns wrong. Australians can face a 25% penalty for carelessly miscalculating how much they earned from shares, investment properties, and now cryptocurrency.

Experts are experts for a reason. Due to the ever-changing nature of our world, this year Australians need to visit a tax professional/expert to help them to understand their entitlements, and ensure they are receiving the deductions they are entitled to.

Each taxpayer has different entitlements and requires personalised and professional advice. We [at H&R Block] recommend all Aussies have a conversation with their tax agent.

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Mark Chapman is director of tax communications at H&R Block, Australia's largest firm of tax accountants, and is a regular contributor to Money. Mark is a Chartered Accountant, CPA and Chartered Tax Adviser and holds a Masters of Tax Law from the University of New South Wales. Previously, he was a tax adviser for over 20 years, specialising in individual and small business tax, in both the UK and Australia. As well as operating his own private practice, Mark spent seven years as a Senior Director with the Australian Taxation Office. He is the author of Life and Taxes: A Look at Life Through Tax.