Are you getting ready to lodge your tax return this year?
The majority of us probably aren’t, because it’s one of those jobs no-one really likes, even though it could result in a refund!
To help you, we’ve done some research and have come up with 5 tips specifically for PAYG income earners.
Check out your occupation on the ATO guide to know what you can claim
Depending on your job, there are different rules as to what you can claim a deduction for.
First, make sure you visit www.ato.gov.au/occupations to know what expenses you can claim as a deduction.
There are 3 essential rules to for all claims which are:
- You personally must have spent the money and not have been reimbursed by your employer.
- The expense must directly relate to your job.
- You must keep a record to prove you paid for it.
Make sure you claim daily travel expenses if you’re eligible
If you have job that you travel to each day and then return home, you unfortunately cannot claim this travel as the tax office classes it as “private travel”.
So when can you claim? Here are some examples;
- If you have a second job, you can claim the cost of travel directly between your two jobs – it cannot involve your home.
- Any travel you do directly from your workplace to another related workplace (e.g. a client), and then back to your work or to your home.
- If you need to carry big tools or equipment that you can’t leave at your workplace.
REMEMBER: You must complete a logbook for your car which includes odometer readings and keep all receipts for any car expenses incurred.
Click here to go to the ATO’s website page regarding travel expenses.
Make sure you’re eligible to claim clothing and laundry expenses
The ATO has indicated a crack down on this particular claim, so it’s in your best interest to check the ATO’s criteria on their website if you have any doubt this year.
Be mindful that you can only claim expenses related to work clothing if:
- What you wear is clearly specific to your employer/occupation – it can’t look like “everyday wear” and must be easily recognised to the public, such as a designed uniform by your employer that has its unique logo displayed on it.
- Your job requires protective clothing as there is a real risk of illness or injury if you don’t wear it.
The ATO also expects you to provide receipts/diary entries to support your cleaning cost if they exceed $150.
For at home cleaning claims (e.g. washing, ironing and drying), they’ve outlined a reasonable cost of $1 per full load or 50 cents if its mixed with personal clothing.
BEWARE: If you try to claim more than this, they can ask you to verify so make sure you’ve got evidence to back it up.
Click here to go to the ATO’s website page regarding clothing and laundry expenses.
Don’t claim anything you’ve not checked because the ATO can charge you a penalty
There are a number of ways you can be penalised by the ATO such as:
- Making a misleading statement/claim
- Failing to lodge your tax return on time
- Not meeting tax obligations
Consequently if you are in doubt, it’s best to contact the ATO or a registered tax adviser before you lodge.
Use only trustworthy websites (such as the ATO’s and ASIC’s moneysmart) for tax information
The ATO has a very user-friendly website which covers most general queries, plus a live chat function and ASIC’s Moneysmart website is great for explaining tax very clearly.
Use these reputable sites as your most reliable tool, because googling a question and trusting another websites information could provide you incorrect and costly information.
Do you like to use APP’S? If so, check out the ATO’s APP called myDeductions – where you can record deductions, photograph receipts, record car trips and more. Then when tax time comes round, it allows you to forward all the information to your tax agent or if you do your tax yourself, you can even upload it straight to myTax.
Good luck with lodging your tax return this year!
Oh, and if you are expecting a refund this year but would really like the cash sooner, check out our Tax Time Offer!