Tax season always seems to be “just around the corner”, and the biggest question we hear is always about how to get more back.
With some clever strategies and good record-keeping, you can maximise your tax refund by claiming all the deductions and offsets you’re entitled to. Let’s find the best ways to get the most out of your tax return for 2024 and beyond.
Understanding Your Tax Obligations
Understanding your tax obligations is crucial to ensure you’re meeting your tax requirements and taking advantage of the tax deductions you’re eligible for.
In Australia, the tax year runs from 1 July to 30 June, and you may need to lodge a tax return if you earned Australian income during this period. The deadline to lodge your tax return is 31 October if you’re doing your own tax.
It’s essential to keep accurate records of your income and expenses throughout the year to make the tax return process smoother.
Work-Related Expenses You Can Claim as a Tax Deduction Include:
- Vehicle and travel expenses for work
- Clothing, laundry and dry-cleaning for uniforms or protective gear
- Home office expenses
- Mobile phone and internet for work use
- Tools, equipment and other work-related assets
- Self-education expenses related to your current job
- Union fees and subscriptions to professional associations
You can also claim deductions for managing your tax affairs, donations to registered charities and income protection insurance premiums.
The Secret? Good Record Keeping
To claim any deductions, you must have evidence of your expenses. This includes:
- Receipts or invoices
- Bank and credit card statements
- Logbooks and diaries for work-related car expenses
- Timesheets or rosters for work hours
The ATO app’s myDeductions tool allows you to store your records electronically throughout the year. You’ll be ready when you need to lodge by keeping good records.
Work from Home Deductions
With work-from-home still popular in 2024, home office expenses are a big deduction area. The ATO has three ways to calculate your claim:
- Shortcut method: Claim 80 cents per work hour for all additional expenses. This method is available from 1 March 2020 to 30 June 2022.
- Fixed-rate method: Claim 52 cents per work hour for heating, cooling, lighting, cleaning and furniture depreciation. Claim phone, internet, computer consumables and stationery separately.
- Actual cost method: Claim the work-related portion of all expenses on a reasonable basis.
Here’s a comparison of the methods:
Method | Rate per hour | Calculation |
80 cents | Total hours worked x 80 cents | |
Fixed-rate | 52 cents | Total hours worked x 52 cents + other costs |
Actual cost | N/A | Actual costs x work-related percentage |
Tax Offsets
Tax offsets reduce your tax payable. In 2024 you may be eligible for:
- Low and middle-income tax offset: Up to $1,080 if you earn under $126,000.
- Low-income tax offset: Up to $700 if you earn under $66,667.
- Seniors and pensioners tax offset: Up to $2,230 if you’re an eligible senior or pensioner.
- Superannuation tax offset: Up to $540 if you make after-tax super contributions for a low-income or non-working spouse.
Make sure you’re claiming all that apply to you.
Donations
Donating to registered charities helps good causes and increases your refund. You can claim a donation deduction over $2 if you have a receipt. Keep track of your yearly donations – even small amounts add up.
Prepaying Expenses
Consider prepaying some expenses to bring forward deductions into this financial year. This works well for:
- Income protection insurance premiums
- Professional subscriptions and union fees
- Interest on investment loans
You can claim the deduction this year and increase your refund by prepaying these expenses.
Superannuation Strategies
Contributing to super can have tax benefits. If you’re a low or middle-income earner making personal after tax contributions to your super fund, you may be eligible for the government co-contribution scheme.
For higher income earners, consider salary sacrificing into super. This reduces your taxable income and increases your retirement savings.
Investment Considerations
If you have investments, review your portfolio before the end of the financial year. Selling underperforming assets allows you to offset capital gains with capital losses and reduce tax.
But be careful of ‘wash sales’ – selling an asset and buying it back within 30 days solely for tax purposes. The ATO watches out for these and may deny the tax benefit.
Seeking Professional Advice
While these tips will help you get the most out of your tax refund, everyone’s situation differs. A registered tax agent can ensure you claim everything you’re entitled to and help you with complex tax situations.
Tax agents can advise on:
- Investment properties and negative gearing
- Capital gains tax
- Foreign income
- Small business deductions
Tax agent fees are tax deductible, so their expertise is even more valuable.
Staying Compliant
While getting the biggest refund is the goal, staying within the law is important. The ATO uses data matching and analytics to detect incorrect or fraudulent claims. Overclaiming deductions can result in penalties, interest charges, and criminal charges in serious cases.
Make sure your claims are genuine and backed up with documentation. If you’re unsure about a deduction, seek professional advice rather than get a penalty.
Preparing Your Tax Return
Preparing your tax return involves gathering and organising all your information regarding income and deductions. You’ll need to declare all your income, including employment income, investment income, rental income, and other income.
You may also be entitled to claim tax deductions for work-related or investment expenses. To claim a deduction, you must keep records of the cost and how you calculated your claim.
Lodging Your Tax Return
Lodging your tax return can be online using myTax, the ATO’s free online tax return. You’ll need a myGov account linked to the ATO to lodge online.
Returns lodged through myTax are usually processed within two weeks. Your tax return will automatically include most information from employers, banks, government agencies, and health funds by late July. You can use the ATO’s ‘how-to’ videos to help you lodge online using myTax.
Maximising Your Return
Maximising your tax return involves claiming all the tax deductions you’re eligible for and ensuring you take advantage of the tax offset. You can claim a deduction for work-related expenses, such as uniforms and protective clothing, tools and equipment, travel expenses, and professional fees.
You may also claim a deduction for investment expenses, such as interest on loans, dividend income, and capital gains and losses. Keeping accurate records of your expenses and income will help you calculate and report any capital gains or losses.
Get an Accountant Maximise to Your Tax Return
If you’re unsure about any aspect of your tax return or want to ensure you get the maximum refund, consider getting professional help from a registered tax agent.
A registered tax agent can help you prepare and lodge your tax return, ensure you’re claiming all the tax deductions you’re eligible for, and provide guidance on tax planning and strategy. You can check if the accountant or agent is registered on the tax practitioner register.
Most registered agents have special lodgment schedules and can lodge returns for their clients later than the 31 October deadline.
Disclaimer
Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is designed to be a partial source of information and should not be seen as legal or tax advice. You should, where necessary, seek your advice for any legal or tax issues raised in your business affairs.
