The new financial year is here, and with a new financial year comes the familiar hustle and bustle of getting your paperwork together and lodging with a Business Edge Accountants.
We know that lodging your tax returns with MYGOV can seem quick and painless, but it still has its downsides when half of the items you’ve claimed for Deductions turn out to be non-tax deductible or simply more often simply not claimed.
For your ease of access and peace of mind, we’ve assembled a simple To-Do list for your tax return below or download one our guide before you book in. Follow along with the advice below and you’re golden!
What Can I Claim for Deductions?
A deduction (by definition) is an amount that’s deducted from something, which in this case is the tax. And to claim a deduction you must have incurred the expense for your work only, or at least partially used for your work if you’ve used your Mobile to contact clients.
However, you legally cannot claim an expense you haven’t paid for, and the result of such a claim can be a penalization in the form of a fine from the ATO for fraudulence.
The Australian Tax Office (ATO) has been cracking down on common deductions since the last tax year, sifting through deductions that many claims in their returns that they haven’t paid for, or claimed just that little bit more for than they should. We’ve included the link just for your perusal and ease of access (Check out the link!: https://www.ato.gov.au/Media-centre/Media-releases/ATO-guide-to-the-5-most-common-Tax-Time-mistakes/).
General deductions you’ve most likely paid for and can claim:
- Car travel
- Clothing (Compulsory work uniform, Work-related specific clothing, Protective Clothing)
- Self-funded education expenses
- Mobile Phone
- Home Office
- Tools (and depreciation for power tools)
- Laundry and Dry Cleaning
What Deductions Can’t I claim?
Many taxpayers are focused on getting the most of their refunds, but they never really stop to think about what they shouldn’t be claiming.
Deductions you cannot claim:
- Tools and equipment that are more than $300 that you don’t have any receipts for
- Car expenses that have already been salary sacrificed
- Meals you purchased when you worked away from home that isn’t an allowance
- Everyday clothing, even if your employer requests you wear them
- Self-education expenses that aren’t directly related to your work
- Phone or internet use that is personal
- Laundry and Dry-Cleaning expenses that are over $150 that do not have receipts or a logbook
- Traveling for private use; a portion of the time you had traveled for your own purpose while traveling for work
- Travel from Home to Work, as it’s termed as private use
What Do I Declare as Income?
The ATO terms income as anything from Bank Interest, Dividends, to your usual group certificates from your employer. All incomes types that you have earned must be included and entered in, including your own business income which is termed as ‘Sole Trader’ income.
To give you a broader aspect of what’s termed as income:
- Compensation and Insurance
- Discounted shares under Employee Share Schemes
- Business, Partnership or trust income
- Foreign income
- Investment income, which is classed as Interest, dividends, capital gains and rent
- Super pension, government payments and annuities
- Employment income
- Crowdfunding income
- Economy sharing income (which can be Uber, Air BNB)
For more information on what information must be declared, check out the link below to the ATO’s post on income!
Still Feeling Uncertain?
If you’re still doubting your own abilities to lodge a DIY tax return by yourself or feel like you’re just not getting enough of a REFUND, don’t be shy and Book in Online today with us.