How to get the most out of your tax return for 20/21

Aussie Taxpayers, its that time of the year again. Its officially tax time of the year, which means some Aussies may cop a small fortune while some are left with few pennies. However, there are some strategies that may help you make the most of your tax return. These strategies save you a few extra dollars in your account and could earn you a little bump in your tax return.

Keep record of your spending

• Keep track of your spending for the entire financial year. It sure is a bit of a lost if you haven’t been holding on the receipts for the year. But keep that in my mind from today.
• You do not need to keep records of literally everything. Australian Taxation Office has provided a limitation on how much tax deduction you can claim without proper documents. As an example, you do not need to provide receipts to claim 5,000 kilometres worth of petrol.
• ATO’s myDeduction app helps in keeping record of your receipts for the year-ends calculations.

As you get into the habit of recording your spending, you will be able to claim for more than you would without proper documentation.

Understand the deductibles and non-deductibles

• You need to be aware of what expenses you can claim. The list is pretty long which can be checked with the ATO.
• There are a number of portions that you can claim as deductibles while still working from home such as, electricity, internet and phone bills.
• Following rules by the ATO helps in figuring out what can be claimed as a deductible:
• Money has been spent by yourself and were not reimbursed.
• Spending was directly related to earning your income.
• Keep records to prove it.

Know when to make tax-deductible purchases

• Buying tax-deductible assets at the end of the financial year is pointless, as it will not produce enough deductions. If the assets are bought at the beginning of the financial year, the depreciation on the asset have much more impact if it is spread over a year.

Plan where to spend your refund

• Now that you have a noticeable refund on your hand, blow it on some of the important things, such as, pay off some debts, put it into your saving account and save for your goals.

For more information on how to lodge your tax return, visit the ATO website.