Yahoo Finance How to get the most money back on your tax return
Everyone's circumstances are different so if you really want to maximise your tax return, it's best to seek professional advice.
But if you're doing your own taxes, there are certain basic axioms to follow if you want to give yourself the best chance of reducing the tax owed.
Chartered Accountants ANZ senior tax advocate Susan Franks says preparation is critical.
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"Tax time can send many of us into a panicked frenzy as we race to find receipts and look up what we can claim, in order to submit our return on time," she said.
"But if you do a little preparation and are aware of the rules which might impact upon you, tax time can be a relatively painless experience, and you may be pleasantly surprised with your tax refund."
As tax time approaches, the Australian Taxation Office has warned it will keep a keen eye on the legitimacy of many commonly used deductions. Workplace expenses, rental income and empty Airbnb listings are all up for scrutiny.
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"The ATO has cottoned onto people making unusual claims, [so] they are now using sophisticated analytics to compare taxpayers to others in similar occupations earning a similar salary,” said Franks.
So with the tax man looking over your shoulder for any slip-ups, here are CA's seven tips to legitimately maximise your return:
1. Keep a record of all your purchases
"Keeping your records from the start will ensure you don’t end up paying more tax than you need to," said Franks.
2. Make additional contributions to your superannuation
"Changes have been made which allow you to make extra contributions, so it is important to know if you qualify."
3. Report all sources of income
"Amounts received from second jobs, for renting out a room or a house on Airbnb or providing a service in Airtasker or selling trading stock on eBay will generally be income," said Franks.
"The Australian Tax Office receives information about these payments so ensure that you report them in your tax return."
4. Consider being charitable
"Not only is giving to a charity that is a deductible gift recipient worthwhile, contributions over $2 are also deductible."
5. Know what you can claim as expenses
"An expense may be your vehicle, clothing or computer which have helped you earn income during the year, however this varies from job-to-job. Take care not to claim amounts that relate to private use."
6. Your employer might be using Single Touch Payroll
"Many Australian employers are switching on ‘Single Touch Payroll’ functions, which report pay-as-you-go and super data to the ATO. Find out what Single Touch Payroll means for you as an employee."
7. Get professional assistance
But if you really want to maximise your return, nothing beats a person who does it for a living. And there's a small tax incentive for the fee you pay for the accountant or tax agent as well.
"Taxpayers should also take advantage of the services around them - tax agent fees are deductible in the following income year," Franks said.
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