Australian Tax Return Tips

With some of the world's most stunning beaches and an abundance of unique animals, Australia is a fantastic place to call home. But there are a lot of things that could go wrong here, and you might not even be aware of some of them. Your Australian Tax Return is one of the things that fall under this category.

You have until the end of this fiscal year to complete what is known as the Australian Tax Return; if you do not, you will be subject to penalties for your failure to comply with this requirement. The government requires Australians to file their tax returns on time so that they can determine whether or not they owe money to the government or whether or not they are owed money by the government. If people don't file their tax returns, we won't know who owes us money and who we owe money to, which means that we won't ever be able to finish paying our taxes!

This blog post is loaded with helpful hints and advice that you can use to complete your taxes on time. You'll get information on how to fill out a tax return, what the Australian Taxation Office (ATO) expects from you, and how much it costs for an individual to fill out their own tax return. What are some of the most typical errors that people make? How can I determine whether or not my employer has deducted an adequate amount of income tax from my paycheck? In the final section, you'll find some useful information regarding your tax return in Australia! Continue going...

This post will focus on the importance of completing your taxes as soon as possible. Everyone is required to submit their Australian Tax Return as quickly as they can, so that they are aware of the amount of money they owe you.

Australian Tax Return Tips

Do you have opportunities to increase the money you've worked so hard to earn? When trying to get the most money back from their taxes, many people make the mistake of not taking advantage of all of the deductions they are eligible for because they are either uninformed or disorganised. Learning how to raise the amount of money that you keep is an excellent method to make the most of your tax return, especially considering that the typical tax return in Australia is approximately $2,574.

How do you get started, particularly if you are not an experienced tax preparer? The process of getting ready for tax season is a lot simpler these days than it was in the past. You'll be able to dramatically reduce the amount of stress (and time) associated with getting your financial life in order if you use a few straightforward programmes and become familiar with the fundamental laws governing deductions.

The Australian Taxation Office (ATO) stated that it was aware of the difficulties that COVID-19 had caused for workers and that it intended to make filing returns for this year as simple as is humanly practicable.

During this tax season, the Australian Taxation Office (ATO) Assistant Commissioner Karen Foat stated that the tax office has a variety of different strategies to serve taxpayers and the community.

According to Ms. Foat, "We are aware that a large number of our clients and their agents will have queries regarding how various forms of income and expenses may affect their responsibilities this year."

"We're doing what we can to make sure folks are aware of how to do things properly."

"We have published information on our website to help you get it right when lodging this year, including the 'Tax Time Essentials' page, which is a one-stop-shop for the things that are a little different this year and how they impact your return," "We have published information on our website to help you get it right when lodging this year,"

Warning from ATO: Don't Wait Until It's Too Late

Foat recommended that people who are filing their taxes for the first time connect their myGov account to the ATO before July 1, 2020.

If you take this step, you will be able to file your return online, monitor the status of any refunds you are due, and view previous tax records.

In order to verify your identity and allow you to link the services, you will be required to answer two questions. They will be based on personal information, such as the details of your bank account, or a statement of income, or a payment summary from Centrelink from the last two years.

However, if you are unable to supply sufficient information, you will be required to get in touch with the ATO in order to obtain a one-of-a-kind connecting code. This code can be input in place of the questions that need to be answered. Just remember to have your Individual Taxpayer Identification Number as well as your driver's licence or Medicare card handy before you call.

According to Foat, the need for a connecting code was the primary motivation for people to contact the business in July of last year. If you require a linking code, the month of June is an excellent time to have that taken care of.

Income Statements: First, Prepare Your Taxes

According to Foat, another significant factor contributing to delays during tax season each year was the fact that one in five people filed their returns before possessing complete information regarding their income. Therefore, she suggested that Australians put off doing their taxes until the month of July was over.

Before you submit your return, she advised, "Before you check that your company has finalised the information in your income statement and that it is marked as 'tax ready,'" it is vital to ensure that your employer has finalised the information in your income statement.

Your income statements will include details such as your salary or pay, the amount of tax that was withheld according to the Pay As You Go (PAYG) system, and any employer super contributions. Employers have until July 31st to finalise these statements, after which they will be given directly to the ATO and will be included automatically in your tax return.

Your tax return will also have other information that has been automatically placed into it, such as information from banks, health funds, and government agencies. This will take place for the vast majority of individuals by the end of July," Foat stated further.

She mentioned that once your prefill data becomes accessible, lodging makes the process of filing taxes significantly simpler.

If, on the other hand, you are going to be the one to fill in the gaps yourself, you should check to make sure that the information you have provided is "full, correct, and up to date" in order to avoid any delays or financial obligations in the future.

What Will Happen If I Err On My Tax Return?

Have you neglected to include the revenue from your former work or claim a deduction to which you are legally entitled? Don't lose your cool! You are able to rectify the situation by submitting a request for an adjustment to your income tax return. This can be done online through myGov or sent to the ATO in the form of a letter or a form.

In most cases, you won't have to wait longer than two years after the date of the evaluation to submit an update. However, in the event that you do not meet the two-year threshold, you should instead submit an objection form.

Do you have any idea how much tax you might have to pay this year? Then, please use our income tax calculator, and we will perform the necessary calculations for you.

Calculate Your Tax Bracket

Your first step in maximising your tax return is to ensure that you have correctly determined which tax band you fall into. You won't have a complete understanding of the scope of your tax responsibilities until you determine which tax bracket you fall into.

From one year to the next, the tax brackets do not always remain the same. To get a better idea of where you stand, you should visit the website of the Australian Taxation Office and look at the income tax rates for single people and married couples. Once you have determined which tax bracket you fall into, you will be in a better position to examine the deductions you are eligible for.

Create A System For Receipts

You are not the only one who shoves their receipts into a secret drawer or a large envelope in order to stay organised. Having said that, a more effective method does exist. To begin, receipts are quite simple to misplace, which is why it is necessary to develop a system. In addition to this, the ink on the paper may become less visible with time, leaving you with a sheet of blank paper.

During tax season, one of the best methods to save money is to carefully keep track of and save all of your receipts. You might be astonished to learn exactly how many things you are eligible to claim, some of which you might not have even been aware of.

Going forwards, you should make it a priority to organise and store all of the receipts that are applicable to your situation, and you should consult with an accountant to determine the specific deductions that are open to you. If you would rather use a more modern method to keep your receipts secure, there are now apps that can assist you digitise them so that you may store them electronically.

Make a Donation to Charity

It is always something to be proud of when you do good, but did you know that it could also pay off when it comes time to file your taxes? Donating money to a charity organisation is an excellent strategy to lower the amount of income subject to taxation while also contributing to the betterment of your community.

You might want to consider making a regular contribution to a charity of your choosing as a means of getting a head start on the next end-of-fiscal-year rush. It's a terrific feeling to be able to help others.

Analyse Your Deductions

Although this may seem like one of our more apparent tax return suggestions, a surprising number of Australian workers do not claim their deductions even though they are eligible. During tax time, you have the ability to deduct a wide variety of expenses, including the following:

• Business travel
• Work training events
• ATO interest
• Educational courses
• Work-related supplies

The list is not exhaustive, so check with the ATO to find out what deductions and credits you are eligible for. In addition, dealing with a tax expert can assist you in claiming all of the deductions that are available to you.

Home And Car Expenses

If you take your automobile to work or conduct business from home, you may be eligible to deduct some additional expenses. Why is this the case? When you use your own vehicle for work or set up a space in your house as an office, you are contributing to the overhead costs of either operating a business or working for one.

To begin, you will need to devise a method for determining how much money you are allotted for your car. Utilizing a mileage tracker app to compute prices and distances incurred over the course of the year is one of the most prevalent approaches. Additionally, if you run your business out of your house, you may be able to deduct some of the associated costs, such as those for equipment, utilities, and so on. However, keeping track of your expenses and maintaining your receipts is essential.

Travel Expenses

Even though you won't be able to deduct the money you spent taking your family to the beach, there's still a chance you could get some of that money back. Travel for business purposes is the primary focus of this conversation. If you are required by your employer to travel for work, you may be eligible to deduct a number of expenses, particularly if you stay overnight in a hotel. You can even deduct the cost of your meals, but only if your employer is not also paying for them.

Get Paid To Read Newspapers, Magazines, And Other Publications

Do you regularly read online versions of trade magazines or journals? It's possible that you qualify for a tax break. If you pay for a subscription to an online or offline publication that assists you in remaining current in your line of work and you can demonstrate a direct link between the subscription and your taxable income, then it is highly likely that you will be able to deduct the cost of the subscription from your taxable income.

A chef or maitre d' who subscribes to a food magazine and a writer or journalist who subscribes to online news sites are both examples of people who might qualify for the discount. The good news is that if the total cost of the membership was under $300, you are eligible for an instant tax benefit.

Consider Investing in a Super Fund

It's possible that making contributions to your retirement account could be one of the most effective strategies to get the most out of your tax refund. This is especially relevant for workers making an annual salary of less than $52,000. The government will contribute fifty cents to your retirement account for every dollar that you put into it.

Also, if you are married and one of you makes less than $40,000 per year, the higher-earning partner can contribute up to $3,000 to the lower-earning partner's super fund. This applies only if both partners are Australian citizens or permanent residents. This results in a tax offset equivalent to 18% of the original amount. One more time, this is an investment that will be profitable in the long term!

Don’t File Late

If you miss the deadline to make your claim by October 31, you may be subject to financial penalties. Another important date to take notice of is the deadline for making tax payments, which is three weeks after the deadline for submitting returns, or by November 21. If you are late in paying your tax liability, the Australian Taxation Office (ATO) is likely to assess interest fees against you.

The majority of taxpayers submit their returns electronically through their myGov accounts. The majority of the required information from your company, banks, government organisations, health funds, and other third parties is prefilled by the time late July rolls around, which helps to streamline the process.

Filling out your return for your anticipated tax refund online should help speed up the process of obtaining the money. When an online return is submitted to the ATO, a refund is typically issued within a period of two weeks. Paper returns require human processing, which might take up to ten weeks to complete.

This year, employers have been required to report using Single Touch Payroll, which is a term that refers to the direct transmission of payroll data to the ATO in real time. This implies that you will not receive a payment summary from your employer. Instead, you will be able to see an income statement through your myGov account by the 31st of July.

Tips For Increasing Your Refund

The Australian Taxation Office (ATO) has created a quicker way for claiming tax deductions connected to working from home in acknowledgement of the changes that COVID-19 has brought about to the working arrangements of many employees.

You are eligible to take a deduction of 80 cents for each hour that you work from home between the 1st of March and the 30th of June, provided that you are performing your regular employment obligations and have incurred additional operating expenses as a result of working from home.

A helpful hint: Make sure to keep track of the number of hours you put in when working from home.

Trap: If you choose to go about things in this manner, you won't be able to deduct any additional costs associated with working.

You are free to choose to continue calculating your deduction using any of the existing methods that are at your disposal (e.g. the fixed-rate method of 52 cents per hour or the actual cost method). You have the option of picking whichever of the three approaches will result in the lowest amount of tax liability for you.

Deductions for acceptable capital works and capital allowances (depreciation) should be claimed if you are the owner of a rental property. Be aware that the regulations changed on July 1, 2017, which limits the amount of capital allowance deductions that may be claimed for used assets that were purchased after May 9, 2017. However, investors who purchase new plant and equipment will still be allowed to claim depreciation expenditures on these assets for the duration of their investment.

Tip: Employ the services of a quantity surveyor to conduct an evaluation and draw up a depreciation report in order to specify the amounts that can be claimed on your annual tax return. The expense of having a report on depreciation prepared can also be written off as an expense.

Super Contributions

It is no longer necessary to "salary sacrifice" payments to your retirement account in order to obtain tax benefits. A tax deduction can now be claimed for personal contributions to superannuation that are put into an eligible fund by any individual who is under the age of 75 (including those aged 65-74 years old who satisfy the statutory work test).

If you want to claim a deduction, you need to give your super fund a "notice of intent to claim" on or before the day the tax return for 2019-20 is lodged, or the 20th of June, 2021, whichever comes first. This must be done in order to meet the requirements.

Be wary of the cap on concessional contributions, which stands at $25,000 as of this writing; you should also limit deductible donations to the cap amount in order to avoid incurring excess concessional contributions tax.

Tax-Deductible Gifts

Make sure that you have collected all of the donations that were made to deductible gift recipients during the year. Because taxpayers frequently fail to keep records, they frequently fail to remember to claim them. Finding electronic receipts sent by email has grown increasingly common, which has resulted in an improvement in the convenience with which these receipts may be located.

Impact of COVID-19 on Work-Related Expenses

At tax time, the Australian Taxation Office (ATO) anticipates seeing a sizeable increase in the number of persons claiming deductions for working from home or for purchasing work-related safety equipment.

Costs of Working from Home

The ATO has already announced a temporary "shortcut technique" that will be in effect from the first of March 2020 to the 30th of June 2020.

You are able to claim eighty cents for every hour that you work from home, and this strategy also takes care of all of your deductible operating expenses.

This new tariff is available to more than one person at a time if they live in the same house. For instance, a married couple who lives together but keeps their finances separate could each individually claim the rate of 80 cents per hour.

People who claim their expenses for working from home using the simplified approach should add the amount at the 'other work-related expenses' question in your tax return and include 'COVID-hourly rate' as the description. This is because the simplified way uses the COVID technique.

If you choose to use the expedited approach, the only thing you have to do to provide evidence of your claim is keep a record of the number of hours you worked from home. The fact that it is all-inclusive, however, means that you cannot make a claim for any other costs associated with working from home.

Taxpayers always have the option of utilising one of the other available approaches to compute their expenses associated with working from home, should they so choose.

Protective Clothing

You might be able to get reimbursement for COVID-19-related protective equipment if you put a lot more focus on maintaining good hygiene.

During the COVID-19 measures, taxpayers who work in jobs that require physical contact or proximity with customers or clients may be able to claim a deduction for items such as gloves, face masks, sanitizer or anti-bacterial spray if they have paid for the items and have not been reimbursed for the costs. This deduction is only available if the taxpayers have paid for the items out of their own pocket.

"Industries such as healthcare, retail, and hospitality are included in this category."

Home To Work Travel

The cost of getting to and from work did not qualify as a deductible item.

Because COVID-19 does not make an exception for persons who work from home, the vast majority of workers will continue to be unable to deduct the money they spend travelling to and from work.

For instance, if COVID-19 forces you to work from home but you still have to report to your usual workplace once a week, the commute from your house to your place of employment is still considered private travel and hence cannot be claimed.

Reduce Pointless Claims for a Period of Time

Ms. Foat stated that the ATO anticipated a decrease in the number of claims for travel expenditures and laundry expenses as a result of persons working from home.

You are not eligible to receive reimbursement for travel costs if the trip is not related to your job. In the same vein, you cannot submit a claim for laundry costs if you are not wearing your company uniform.

It is nevertheless essential to comply with the following three golden rules:

• To begin, you must have used the money and not been given any reimbursement for it.
• Second, there must be some connection to the way you make your living.
• Third, you need to have documentation to back up your claims.

Private Health Cover

If you have private hospital insurance coverage, you will not be responsible for paying the Medicare Levy Surcharge (MLS). Simply having "extras" or "ancillary" coverage is not sufficient on its own.

If a taxpayer has an annual income of more than $90,000 (singles) or $180,000 (married filing jointly), the MLS will apply to them (families).

The duty for health insurers to provide members with a private health insurance statement will be eliminated as of the first of July in 2019. If you are submitting your return electronically, the myGov website should be used to prefill the information on your health fund.

If the information has not been received by the 20th of July, you may need to get in touch with your service provider in order to acquire a statement directly.

Regarding COVID-19 and the preparation of tax returns for 2019-20, including the claiming of tax deductions, the ATO has offered useful answers to a number of commonly asked questions on its website. These answers can be found in an effort to provide more information.

Finally, if you are having trouble making your tax payment on time, you should get in touch with the ATO to discuss the several payment methods that are available to you.

Tax Return Tips

If you wait until the end of July or the middle of August, it is likely that the ATO's systems will be able to provide the majority of the information from employers, banks, government agencies, and other third parties. Of course, pre-filling takes care of a large portion of the "paperwork" that is required these days.

After that, we will be able to verify that the information is accurate and submit any deductions that you would like to claim on your taxes. To be completely comprehensive, however, before you come in for your tax appointment, here is a list of the kinds of information that we will need to be able to finish preparing your tax return.

• Payment summaries: The income you have received from your company, super fund, or government payments such as Centrelink or the Department of Veterans Affairs should be detailed in this.
• Bank statements: Include information about any interest you have earned and any fees you have paid throughout the time period covered by this report.
• Shares, unit trusts or managed fund statements: Details regarding any distributions or dividends that have been paid to you (remember that you are required to report any dividends that you have chosen to reinvest as income).
• Buy and sell investment statements: Required in order to compute gains and losses on investments. If you have any shares that you have recently acquired or sold, the relevant information can be found in your online brokerage account, or you can obtain it from your investment adviser or stockbroker.
• Records from your rental property: If you employ a property manager, you will usually get an annual tax statement that shows your income and expenses. If you do not use a property manager, you will need to compile the specifics of your revenue received and expenses spent, including any gains or losses from the sale of property.
• Foreign income: Specifics on pensions or other forms of income received from abroad.
• Private health insurance policy statement: The information you need to complete the section of your tax return dealing with your private health insurance.

Expenditures that Must Be Report

It may appear to be self-evident that certain types of income are subject to taxation, but in order to be comprehensive and stay true to our mission, we have compiled a list of the most common types of income that must be reported on your tax return.

• Employment income
• Colossal annuities, pensions, and government payouts
• Revenue derived from investments, which may include interest, dividends, rent, or capital gains
• Earnings from corporations, partnerships, and trusts
• Earnings from overseas
• Earnings from various crowdfunding campaigns, such as the collection of funds for a business endeavour in which you hope to make a profit
• Earnings from participation in the sharing economy, such as those generated by Airtasker, Uber, or Airbnb
• Other revenue can come from things like compensation and insurance payments, discounted shares through employee share programmes, prizes and awards, and employee share plans. If you are unsure about something, please check with us.

Deductions

You have the legal right to claim deductions for certain expenses on your tax return. The majority of these expenditures, which are referred to as "work-related expenses," should be directly tied to the production of your income. A deduction will, of course, lower your taxable income, which will result in a lower overall tax bill.

To be eligible for a deduction for costs associated with labour, you must:

• you must have used the money yourself, as you will not have been compensated for it
• it ought to have a clear connection to the production of your taxable income
• you ought to be in possession of a record to back up the claim that you made.

If your expenditures fall within these parameters, the following is a list of things that you might be allowed to deduct from your taxes.

• Vehicle and travel expenses:This typically does not cover the cost of travel between your place of employment and your residence; but, if you use your automobile for work or work in multiple locations, you may be eligible to claim a deduction for this expense.
• Clothing, laundry and dry-cleaning expenses: If you want to be able to legally deduct the cost of wearing a uniform, that uniform needs to be one of a kind and stand out from the crowd. For instance, it needs to bear the emblem of your business or be industry-specific, such as chef's pants or coloured safety vests.
• Gifts and donations: Donations can only be deducted if they were given to "deductible gift recipients," which are organisations that have been approved by the ATO.
• Home office expenses: Your computer, phone, or other electronic gadget, in addition to any ongoing maintenance fees, like internet subscription, could be considered charges. You are only allowed to claim the portion of expenses that relate to work and not to your own use, and there is the possibility that there is room for depreciation.
• Interest, dividend and other investment income deductions: Investing periodicals and subscriptions, interest, account fees, depreciation on your computer, and internet connectivity are some examples of expenses associated with investing.
• Self-education expenses: As long as the coursework is relevant to your current position, you might be eligible to get reimbursement for expenditures such as tuition, dues to a student union, textbooks, stationery, internet access, home office costs, professional publications, and even some travel.
• Tools, equipment and other equipment: You are eligible to take a deduction for some or all of the cost of any tools or equipment that you purchase specifically for the purpose of increasing your income. The value of the asset has a role in determining the category of deduction that can be claimed for it. You are eligible for an instant deduction for the cost of any items that either do not come as part of a set and cost less than $300 individually or that do come as part of a set but cost less than $300 when purchased collectively. You are eligible to take a deduction for the value depreciation of things that cost more than $300 individually or that are a component of a set that costs more than $300 when purchased as a whole.
• Other deductions: The cost of managing your tax affairs, income protection insurance (but not if it's through your super fund), overtime meals, personal contributions to your super fund (that is, contributions made after taxes have been taken out), and other expenses incurred in the course of earning an income are examples of additional things that can be claimed as tax deductions.

Obviously, you should consult with this office for even more suggestions. Even if some of the above seem to apply to your position, it is still in your best interest to check with us first, even if some of the above seem to apply to your case. Circumstances sometimes define what may and typically cannot be claimed as a deduction.

Away From The Deduction Menu

The Australian Taxation Office (ATO) is committed to assisting taxpayers in accurately calculating their deductions, but it is also on the alert for warning signs that could indicate individuals are acting inappropriately. The following is a list of deductions that, in most cases, you won't be able to claim on your tax return.

• The commute from home to the office is an example of what is typically thought of as private travel.
• Expenses related to your vehicle, unless you are transporting cumbersome items or equipment that your employer compels you to transport because it is necessary for you to conduct your job (and there is no secure area to store the equipment at work).
• Salary has been given up in order to pay for car expenses.
• Expenses related to meals, with the exception of situations in which you were compelled to work away from home overnight.
• Travel for personal reasons, which also includes any personal travel time taken on business trips.
• Even if your company needs you to wear them, the regular clothes you purchased specifically for the purpose of wearing them at work (such as a suit or black pants, for example).
• Costs associated with continuing your education that are not directly related to the job that you already hold.
• Expenses incurred for personal usage that are related to the use of the telephone or the internet.