Tips for lodging your tax return

We have already assisted many of you to prepare & lodge your income tax returns. We are also working with many of you as we speak to get everything finalised & up to date for the financial year ending 30th June 2021. It’s a good time to look at what we can do by giving out tips for lodging your tax return.

 

1.     Lodging your tax return on time

It’s important to lodge on time, even if you can’t pay, because it shows the ATO that you’re aware of your obligations and are doing your best to meet them. It will also give you certainty of your tax position.

When lodging your income tax return, don’t forget to:
    • include assessable government payments such as JobKeeper, and other income (for example, dividends, interest, and capital gains), and
    • report any rental relief you may have received as a commercial tenant.

It’s important that we complete your financial affairs by the due date as we have noticed that the ATO is back on the war path. Let’s get your house in order, so that they pick on someone else instead.

Contact us as soon as possible if you’re worried you can’t lodge or pay on time so we can provide tailored support.

2.     Maximize tax returns from Working from Home Expenses

For most of us, working from home became the norm. You can claim working from home tax expenses if the expense directly is related to earning your income and have a record to prove it. This is a  grey area, certainly not black or white. 

Even though you maybe working from home, home is still a private residence – it is not a ‘place of business’. Taxpayers can claim the standard deduction of $300. However, it isn’t as cut and dry as that. While you may not need receipts to claim up to $300, you must have spent the money, have it been directly related to earning your income and to show how it is deducted.

The tax office will be looking at those claims with a microscope. What we suggest is to have some sort of timesheet to further backup your tax deduction claims. Nevertheless, these are the operating expenses you can claim:

    • Electricity,
    • phone and internet,
    • home office equipment (printers, furniture), and
    • computer consumables (printer paper, ink).

For further details from the Australian Taxation office.

 

3.     Vehicle & travel expenses

On the opposite side of the coin, you can claim a tax deduction on travel related expenses. If a taxpayer is working from home due to COVID-19, but needs to travel to their regular office sometimes, they cannot claim the cost of travel from home to work as these are still private expenses, but there are some ways to maximize your tax returns if you do the following:

    • Where you need a car to preform your work duties,
    • Accommodation expenses if you are required to travel for work,
    • Work requires you to attend multiple workplaces or locations.

4.     Don’t Forget Investment Income when lodging your tax return

You can also think about investments that you might have. You would need your records of sales & purchases and dividend statements if you have shares. If you are wondering how something like Cryptocurrencies are seen by the ATO and how it would affect lodging your tax return, check out our article on how the Australian Taxation Office treats Cryptocurrencies.

In short, more than 600,000 taxpayers are now dabbling in crypto-assets, the ATO has found. Taxpayers with crypto will be slugged with penalties and audits if gains are not declared at tax time. The ATO has flagged a crackdown on cryptocurrency traders during the upcoming tax period.

While it appears, cryptocurrency operates in an anonymous digital world, the ATO are closely tracking where it interacts with the real world through data from banks, financial institutions, and cryptocurrency online exchanges to follow the money back to the taxpayer.


 

Here at Financially Sorted we find ways to maximize and find tips for lodging your tax return. If you need guidance, we are here to help. Book an appointment today & check out our Tax eChecklists.

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