Don’t freak out about tax just work out how much you can claim without falling on the wrong side of the tax office.

YOU work. You pay tax. For most Australians, that’s the simple equation they face.

But rather than baulk at this annual task, treat tax time as a positive experience that will help you share in the $27 billion of annual refunds handed back to individuals.

Government figures show more than three quarters of taxpayers receive a tax refund, averaging about $3600 each.

Employers should have sent group certificates out by July 14, so there’s no excuse for most people to delay getting some money back from the taxman.

“The information for your financial and tax affairs is usually easier to access and closer to mind right after the financial year closes rather than months and months later,” says Anthony Bell, CEO of accounting and advisory firm Bell Partners.

It starts with making sure you claim all the work-related deductions and other personal deductions you legally can. But be sure to keep it legal, because the ATO is targeting excessive deductions across all industries this year after work-related expense claims rose faster than inflation in recent years.

ATO assistant commissioner Adam Kendrick says last year taxpayers claimed work-related expenses of $19.9 billion, up 9 per cent over three years. “There are 13 million individual taxpayers and around 8.5 million of them made a work-related expense claim,” he says.

 The last word ... accountant Anthony Bell says now is the time to act on your tax return. Picture: Jonathan Ng

PLENTY OF CHOICE

Work-related claims allow you to get back some of the money you have spent on work-related travel and motor vehicle expenses, laundry and uniforms, self-education costs related to your work, tools and equipment, union fees and home office expenses such as part of your energy bills, mobile phone and internet use.

The ATO has specific guides for about 30 common occupations that outline what these workers can and can’t claim.

But, Bell says, this year the ATO will be focusing on unusually high work-related expense claims across all industries and occupations and taking a much wider approach than in previous years.

“The ATO will also be paying particular attention to claims that have already been reimbursed by employers, and for private expenses such as travel from home to work, mobile phones, private internet usage and entertainment,” he says.

Kendrick says if you are making large or complex claims it’s best to consult a tax agent. “Our website has some really good, down-to-earth practical tips around claims you can make.”

Bell agrees that accountants can help when it comes to refunds.

“They will find deductions that you never knew existed,” he says.

If you are making large or complex claims it’s best to consult a tax agent. Picture: Craig Wall.

PROVE IT

Etax Accountants senior tax agent Liz Russell says many taxpayers may not realise they can claim things such as work-related mobile phone use, which must be documented alongside your private use over a four-week period to satisfy the ATO.

“The trick is figuring out how much you can claim without falling on the wrong side of the ATO,” she says.

“As tempting as it may be to just pluck a number out of the air, you’ll come unstuck if you’re audited and asked to prove your calculations.”

Deakin University senior lecturer Adrian Raftery, author of 101 Ways To Save Money On Your Tax Legally, says it is crucial to keep receipts because the ATO is increasing its audit activity all the time.

“With the ATO motto of no receipt means no deduction, you could be missing out on legitimate tax deductions by not keeping good records,” he says.

Workers can claim up to $300 of tax deductions without needing receipts, but as soon as you pass $301 you’ll need records of the whole lot. 

Don’t just pluck a number out of the air when claiming deductions as you could be audited
and asked to prove your calculations.

BEYOND THE WORKPLACE

There are plenty of other tax deductions you can claim if you keep records. Donations to registered charities are tax deductible if you handed over more than $2.

You can also claim for the cost of using a tax accountant, income protection insurance, deductions related to interest and dividend income, and personal superannuation contributions if you’re self-employed.

“You will be surprised how many slackos there are that miss out on easy money despite how simple some of these strategies are,” says Raftery.

Origina article published in The Daily Telegraph on 29 July 2015

http://www.dailytelegraph.com.au/get-your-share-of-27-billion-of-annual-tax-refunds/story-fnkrnz8j-1227460693449