If you haven’t lodged a tax return before, or you’re not really sure what to claim, tax time can be a little daunting.
The good news is, submitting your tax return can be a piece of cake when you know what you’re doing. Our simple tips will help you get the biggest refund possible, while making the whole process a breeze.
What documents should I have ready to lodge my tax return?
You need to declare all the money you received each year on your annual tax return. Some documents can be found on MyGov or through a tax agent.
Here’s a quick checklist of items to pull together:
Regular Income documents
- Payment summary or income statement (previously called a group certificate) - You can now find your income statement on your MyGov account under ‘income summary’, or it can be accessed by an accountant on your behalf
- Any freelance or self-employed income
- Income from any activity in the sharing community (Uber, AirBnB, Airtasker, Deliveroo, etc.)
Other Income
- Interest on any savings account.
- Income from any shares you own such as dividends.
- Rent you received from renting out a room privately.
- Rental income on any investment properties you own or have a share in.
- Any other form of income that you received.
Deduction records
- Evidence of any deductions you want to include on your return (more on that below).
Other records
- Private health information (if applicable).
What deductions am I entitled to claim?
There are a couple of questions to ask yourself about each possible deduction you want to claim. If you can answer yes to these four questions, then that expense can usually be included as a deduction on your return:
- Did you pay for the item yourself out of your own pocket?
- You were not reimbursed or paid back by your employer.
- Do you have a receipt or other evidence of the purchase?
- Was the item you purchased for your work?
What deductions can you claim if you are studying?
Most students can only claim deductions on self-education expenses. It’s important to note that you can only claim deductions on these expenses if the course you are studying relates directly to your current job. For example, an engineer studying a masters-in-engineering could likely claim, but a retail worker studying to become a teacher could not.
Common tax deductions for students include:
- Course/tuition fees (not including HECS/HELP).
- Stationery and textbooks.
- Student service fees.
- Union fees.
- Amenity fees.
- Equipment depreciation and repairs (e.g. laptops computer, printer, etc.).
- Car expenses (if applicable).
Work-related deductions for people working during studies also include:
- Uniforms (must have a logo).
- Travel (only for work-related reasons such as training or a conference).
Important notes:
- Just be aware that self-education costs can generally only be claimed if you’re working full-time and studying part-time. We recommend checking the ATO website, or with a tax agent to see what you can claim.
Deductions for young professionals
Work related expenses can be claimed as deductions on your tax return. These expenses can reduce your taxable income which can increase your tax refund.
Common deductions can include:
- Phone expenses (work % only for lease or purchase costs).
- Laptop expenses (work % only for lease or purchase costs).
- Travel expenses.
- (Traveling between venues, to training courses or work-related events).
- Work related training expenses (course fees, equipment, travel costs, accommodation and meals, if you are required to stay away from home for the duration).
- Subscriptions for work related magazines, journals or resources used for your job.
- Personal car expenses (if you use your car as part of your job or to transport supplies or equipment for your boss).
- Tools and equipment – the cost of any tools or equipment you bought or leased to do your job (Power tools, work bags, stationery, lenses, software, materials etc.).
- Safety and Protective items (aprons, sun protection, gloves, ear protection, safety glasses/visors, masks, overalls, harnesses etc.).
- Home office expenses (if you are required to work at home sometimes).
Deductions that most people forget to include:
- Your tax agent fees!
- Insurances (Income protection paid outside of your Superannuation).
- Charity donations (registered charities only).
Keep your receipts!
Many young people get caught in the trap of thinking they can claim big ticket expenses back on tax with no proof of purchase. Always make sure you keep receipts throughout the year. Receipts fade so we recommend taking photos and keeping an album of your receipts. This is also a good way to ensure you’re not forgetting those smaller expenses come tax time. There are heaps of good apps to keep your receipts organised too.
Using a qualified tax agent
When it comes to making tax time as seamless as possible, a tax agent can take you through the whole process and guide you on what you can and can’t claim, all while making sure you have all the correct evidence and documentation to claim your deductions.
This doesn’t mean you have to book an appointment with a tax agent and go for a sit-down appointment. There are numerous online tax agents that allow you to do your tax from the comfort of your own home.
Don’t forget, the cost of using a tax agent can be deducted from your next tax return.
By Liz Russell, Senior Tax Agent at Etax.com.au
The information which is summarised above does not constitute taxation, financial or other professional advice and is general in nature. The views expressed in this article are solely those of the author and do not necessarily represent those of Professional Superannuation Management Pty Ltd, Diversa Trustees Ltd or their employees.
