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Tax tips to act on how to maximise your cash back and avoid ATO hit list

If you work from home, drive for work, have a mobile phone, or a mortgage, there could be ways to get more back on your tax.

ATO Tax form
ATO Tax form (Yahoo Finance Australia)

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 the end of the financial year (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? Here are 10 things to get you started.

Take some time out to gather together all the information you will need to help you prepare your tax returns, including invoices and receipts for work-related expenses and any bank/credit card statements that contain items of work-related expenses that you no longer have (or never had) receipts or invoices for.

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If you’re not sure if it’s claimable, collect together the receipt or invoice anyway and discuss it with your tax agent.

If you don’t have the paperwork, you can’t claim a deduction so it makes sense to set aside this time in advance of the end of the financial year to spare yourself a stressful document hunt whilst you’re actually in the process of getting your return prepared.

In addition, if you’re claiming any expenses that have a work-related element and a private element (such as for the use of a personal mobile phone) set some time aside to work out what a reasonable apportionment is for the work-related bit.

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 year’s tax return so from a cash flow point of view, you can minimise the time between purchase and tax deduction!

Make your claim using the work-related portion of actual costs or the ATO’s 67 cents per hour fixed rate – you need to have a record (for example, timesheets, rosters or a diary) of your work-from-home hours for the entire year using this method.

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, as they believe that too many taxpayers are claiming for journeys they didn’t actually take.

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.

Remember, you can’t claim for mobile phones if you have made a claim for working from home expenses using the 67 cents per hour rate; included in that rate is an element that recognises mobile phone use and therefore a separate claim is “double dipping”, which is firmly on the ATO’s radar!

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.

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.

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.

If you have some spare cash, look at making a personal contribution to your super fund.

Provided the total amount of your contributions (including those made on your behalf by your employer) does not exceed $27,500, 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 30th 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 here.

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 regard the purchase and the sale as effectively the same asset and have issued a Tax Ruling which states that they can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties.

This might seem like I have an ulterior motive, but speak to a tax agent (like H&R Block).

They can identify exactly what you need to do to get into shape for the 2024 tax season and maximise your deductions.