It’s that time of the year again…
Time to start digging out those receipts and gathering your details to lodge your taxes.
Whether it’s via the Australian government’s myTax program, which makes lodging taxes online pretty simple, or setting up an appointment with your accountant, getting back everything you’re owed in deductions is, well let’s face it..pretty tricky!
At Nimble, we believe every cent counts, so here are our top tips for some simple things you can do, to make your tax return bigger and better than ever!
The most painless way to collect receipts 365 days a year
If you want to get the most out of your tax return, you need receipts.
Without them you won’t know what to claim and more importantly, you won’t be able to prove to the ATO that you actually bought the things you’re claiming.
But paper receipts are a drag. By the end of June you’re usually extracting tattered receipts from your wallet, searching through all your drawers and digging out those shoeboxes from the back of the cupboard to track everything down, only to discover that the ink has worn off and you can’t make out most of the details!!
That’s why it is time to go DIGITAL. Here are some great apps that will help you keep everything together and paperless, for tax time.
- Get Pocket Book – An app that can link with your bank accounts, automatically track your purchases and let you tag them to make it easier to find later on. This is a great way to get all your relevant expenses in one place. The major drawback is you still have to hang onto your physical receipts because bank records are not enough for the ATO when it comes to claiming.
- The ATO App – Because this app is designed by the Australian Tax Office there are a lot of cool features that are super helpful for when you’re lodging your return. You can upload all your recorded deductions directly into the myTax program and there are special features to let you add work vehicles and record car trips.
- Expensify – A powerful receipt scanning app that lets you snap a photo of a receipt and convert all the information into searchable text. Also has an automatic GPS mileage feature for tracking deductible travel. Free personal version lets you smart scan 20 receipts a month.
- Evernote – The most simple of all. Download the app, create a folder called ‘Tax’, and every time you have a receipt, just take a photo and put it in the folder. Not the most high-tech solution, but it does the job just fine!
Another quick tip for online purchases is to create a custom folder in your inbox for any relevant e-receipts. This is simple to do with most email types and it means all you need to do is drag and drop the right ones, and you’re sorted for tax time.
Becoming a Clever Claimer!
There is no point having a receipt tracking process if you don’t know what you’re allowed to claim. So before you start sifting through your receipts, get up to speed with what sorts of things are actually deductible in your line of work.
But rather than providing you with a full list of things to claim, especially since they can vary so much across different industries, we’ve put together the most common items that most of us either don’t know or forget about…
If you work outdoors, you can claim sunscreen and any other sun-smart items, on your tax-return. This can even include your makeup, as long as it is in some way sun protective.
If you have a work uniform, or some type of protective clothing you have to wear when you’re working, you can claim up to $1 for every load of washing, drying and ironing you do. This is true even if you do the laundry with your own washing machine (although you have to keep a diary for tax purposes).
If it is related to what you do for a living, you can claim the cost of any magazine or journal subscription. In some industries, such as media, it is even possible to claim pay-TV subscriptions.
Your electricity bill
If you do work from home you can claim part of your electricity bill. The accepted formula is 45c for every hour you work at home.
If you are using it for work purposes (eg: carrying papers or a laptop), then you can claim your handbag just like you could claim a briefcase or any other item you need for work.
Any course or degree you undertake that will help you in your current position or could lead to you getting a better job in the same industry can be claimed on tax. That goes for anything from a weekend barista course to a Masters in Accounting.
In Australia, donations to certain registered charities and non-profit organisations are 100% tax deductible.
Most organisations that qualify will send you an EOFY statement to make claiming easy, so if you’ve been generous in the last financial year, make sure you reap the benefits at tax time.
Your own income
Income protection insurance is the only type of insurance that can be claimed on a tax return regardless of what you do (other types like car or home insurance can only be claimed if the asset is being used to help make income).
Got a big purchase to make? Do it now!
Whether you need a new laptop for work, some new tools or even just a new work uniform, now is the time of year to buy it.
If you wait until June 30th it will mean you have to wait a whole 12 months before you see those tax deducted dollars back in your bank account.
Get a great accountant
Like we said at the start – doing your tax yourself isn’t all that hard.
But when you start looking at claiming more items, it can start to feel like it is getting a bit too tricky to worry about.
It may seem like an unnecessary expense, but the secret to finding a great accountant is that, in most cases, the amount they get you in extra claims will more than cover their initial cost. And the kicker is they can even claim their services on your next tax return!
Sounds great right? Just make sure you know what to and what NOT to look for, with these quick tips:
- Make sure they’re accredited: Anyone with a laptop can charge people to do their tax, so just double check that the accountant you select is recognised by one of the three accountancy bodies in Australia: Chartered Accountants Australia and New Zealand, CPA Australia and the Institute of Public Accountants (IPA).
- Do it in groups: Most accountants will give you a discount for group sessions and referrals so having a bunch of people over for a ‘tax-return dinner party’ can lower the costs.
- Don’t rush: Great accountants are going to be very busy at tax time. If the one you call can’t fit you in when you ask, it’s worth waiting rather than just scheduling in another option who has more availability.
The final thing to remember is that tax planning really is something you should do all year round. There are so many things you can do each year that will help you get more back when it comes to tax-return time, but you have to start doing them when the financial year begins, not as it’s wrapping up.
If you haven’t been practicing your 365-day-tax-planning for this financial year, don’t worry, as it’s definitely NOT the end of the world! Just remember, the quicker you get started, the easier it’s going to be for you to make the most of your tax return.
You should read this bit: The above post contains links to a variety of application software (“App, Apps”) that is not affiliated or associated with Nimble. We do not have any control or responsibility over the content of the Apps. Use of the Apps may be subject to further terms and conditions imposed by the App provider, the owner of the mobile operating system and/or other related parties. The above links belong to a variety of websites and not Nimble, so clicking on, and using them, will take you away from Nimble’s website meaning we’ve got no control or responsibility over the content. Nimble does not endorse and is not affiliated or associated in any way whatsoever to the businesses named in this blog post. The information in this blog post is general information only and does not take into account your objectives, financial situation or needs. For tax advice relating to your specific financial situation, Nimble recommends seeking the services of a qualified Australian tax accountant. The information contained in this blog is correct at the date of publication.