Four ways to boost your tax refund before the deadline
October 31 is the last day to lodge your tax return if you're doing it yourself.
If you have a tax agent, however, the lodgment date is May 15, 2021.
Here are five tips to ensure you don't sell yourself short this tax season.
1. Maximise your refund
For individuals who continued to perform their role during the pandemic from home, they should consider what Working From Home expenses are available to them.
If you are an office worker working at home, the main claimable expenses are your running costs like electricity, gas and other utilities like the internet. You can also claim on your computer, mobile phone and screen expenses, as well as any other equipment used for work.
It is also worthwhile looking at a more accurate allocation for claiming expenses as opposed to the ATO's shortcut method of 80c per hour. It is best to calculate the costs yourself or get a professional to assist as you are likely entitled to more than what the shortcut will calculate.
It is estimated that Australians could be at risk of missing out on $1.1 billion in eligible deductions in the shift to remote working because of unclaimed expenses from people working at home.
On top of the obvious working from home expenses such as your computer, mobile phone and internet, it's important to consider peripheral items which you may have purchased in your home office such as light bulbs, lamps, and computer stands. If you are using an allocation to calculate your running cost for the home office, the biggest expenditure would be electricity, so make sure to calculate this correctly and claim this."
If your role is an essential services function and your employer at the onset of COVID-19 didn't provide you with PPE gear, and you had to source these items yourself, then a deduction may also be available for you and is something you should look into.
2. Avoid common mistakes
The most common mistake for people self lodging is that they are too busy to consider all the expenses available to them and poor record keeping means that they've missed out on tax deductions they would otherwise be eligible for.
To avoid this problem, you should look at electronic data available such as credit card statements to help jog your memory and find invoices which would be tax deductible in relation to your income. To prevent this issue next year, definitely consider utilising online tools which can track receipts and log working from home hours for you so that you have this information on file in the one place.
3. Find out what job-specific deductions you can claim
If you are unsure of what expenses you should be claiming in your role, speak to other colleagues who already work in that industry or get in touch with your industry associations to find out more information from them.
There are also tools online which tell you what your industry peers are commonly claiming on and by how much on average, which can guide you in the right direction. If you spend the time doing your research, you'll be a lot better off when receiving your refund.
4. Keep better records if you've changed jobs or moved to freelancing
The gig economy is only getting bigger and we've noticed most people do have a side business even when they are employed full or part time.
If this is you, we'd suggest that you look at record-keeping tools to ensure a better systematic approach to preparing your taxes, this may be in the form of a bookkeeping software or even apps. If you have a systematic approach where you log costs and receipts throughout the year, you won't miss out on deductions and it will save you time, effort and money.
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