Wednesday, 26 July 2017
Posted by Tom Watson
It’s that time of the year again when millions of Australians take on the arduous task of filling out their taxes, and with the temptation of a potential refund in the thousands of dollars it’s not surprising that many have lodged their returns already.
For those that haven’t, one of the best ways to ensure you get as large a return as possible landing in your bank account is by claiming as many (legal) deductions as you can. But with the ATO’s recent crackdown on unwarranted deductions, online specialists etax.com.au has released some key pointers for Australia’s 13 million taxpayers to help them stay on track.
So, before claiming those Ray-Ban sunnies you’ll need to make sure you can answer yes to these five questions:
Simone Gielis, a senior tax agent at etax.com.au, suggested that taxpayers wanting to employ a bit of creative accounting with their deductions should keep this advice in mind when it comes to lodging their tax, particularly given the ATO’s warnings about deduction abuse.
“Those with broader options for deductions who try to get “creative” with claims are on the fast track to an ATO examination. These can go back years and are very painful for workers who don’t keep good records,” she said.
“However, a bit of help from a tax agent to ensure that you claim all the deductions and tax concessions that you’re entitled to will definitely pay off.”
The ATO made the point in the last week of highlighting the 6.3 million Australians who made expense claims for clothing and laundry last year, totalling a whopping $1.8 billion - a 20% increase in five years.
While the ATO admits that the majority of people claiming clothing deductions do the right thing, the large increase in claims in recent years has meant they will be pay particularly close attention to claims this year.
According to etax.com.au, the average Australian claims $3,413 worth of deductions each year, with real estate agents topping the list of professions with average deduction claims of $8,634 followed by lawyers with an average of $7,156.
“Each occupation has a niche set of rules that govern the relevant tax entitlements, and there are no guarantees when it comes to the minimum refund a taxpayer can expect in each industry,” said Ms Gielis.
“The top claiming fields tend to have two things in common: the nature of their work means they have a lot of work-related expenses, and the employing company doesn’t offset or reimburse them for these costs. So, checkout operators who have minimal expenses will have lower claims, as reflected in the occupation’s average deduction of $814.”
Are you waiting for your own tax refund to come in? Make sure it earns you the most money possible when it hits your account by transferring it into a high interest savings account, otherwise check out these four great ways to make the most of your tax return.