One of the nation’s leading tax experts has revealed what Australians should be doing to ensure they get the most out of their return as the end of the financial year looms.
H&R Block’s Director of Tax Communications Mark Chapman has encouraged Australians to know what costs can be refunded and what mistakes to avoid before they lodge their return for the 2023-24 financial year, which they can do from this coming Monday, July 1.
Mr Chapman’s first piece of advice is for individuals to check their paperwork to ensure they get the most out of claims for work-related expenses.
He said when it comes to these claims, the expense must relate to the employee’s work, they cannot have been reimbursed by their employer, and they must be able to prove that they spent the money with receipts, invoices or statements.
“My tip is to keep electronic copies of all documentation relating to expenses. Paper receipts get lost or fade, so keeping everything together on your phone or computer will save time and effort when you come to complete your tax return,” he told SkyNews.com.au.
“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.”
Mr Chapman said Australians should also ensure they claim expenses incurred while working from home and to be aware of what this might include.
The expenses that can be claimed are costs of heating, cooling, lighting and cleaning costs, as well as computer consumables, stationery and internet.
Also included are the depreciation, or decline in value, of home office furniture and fittings, office equipment and computers for items over $300.
Individuals can claim the actual costs – which require invoices as proof as well as a “reasonable estimate” of how the costs were split between work and private use – or they can use the ATO’s fixed rate of 67 cents per hour.
Mr Chapman warns things like coffee, tea and toilet paper, cannot be claimed despite usually being provided in an office setting.
In addition, Mr Chapman advises Australians not to rely on their prefilled income information from the ATO’s systems.
“Take care though and don’t assume that income data is correct or complete. Particularly if you are lodging early, always use your own information as the key source data,” he said.
“Some people assume that because the data comes from the ATO, it must be right. That’s a dangerous assumption, especially in July and early August.”
He warned it is the individual’s responsibility make sure they don’t omit essential income information as they risk being questioned by the ATO and facing potential ramifications.
Finally, Mr Chapman encouraged Australians to get help with their tax returns if they require it, with 74 per cent of individuals opting to use a tax agent.
“Get your tax return wrong and the comeback is on you, either with a lower refund or ATO penalties,” Mr Chapman said.
“Most people find it far less stressful to simply pass on all their information to a tax agent and leave it to the agent to complete their return, safe in the knowledge that the return will be accurate and complete.
“An experienced agent, like those at H&R Block, will usually be good at sniffing out those obscure tax deductions you didn’t know you could claim so they can often pay for themselves several times over. Best of all, the tax agent’s fee is also tax deductible!”