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Tips to maximise your tax return

Article
24 June 2021
Author: Australian Unity

It’s rapidly coming up to that time of year again – tax return time!

If you haven’t already, it’s time for you to gather everything you need to get your tax return ready.

With many people spending a good portion of the past financial year working from home due to the COVID-19 pandemic, there are still a few rules and conditions in place you need to be aware of before you file your return.

To make sure you get the most out of your tax return, we sat down with Maree Richards, Accounting Manager for Australian Unity Trustees Limited to get some tips.


What expenses can people individually claim for and what proof do they need?

Generally speaking, expenses that are claimable are directly related to your occupation. Things like business-related motor vehicle expenses, professional membership fees, tools of trade, and home office expenses.

“There needs to be a connection between the expense incurred and the income earned for it to be considered tax deductible,” Maree says.

“Other items can include phone and internet, as well as self-education expenses, including books, course fees and associated home office costs.”

The proof required to claim these costs depends on the expense incurred and the portion of the expense being claimed. The types of proof required can include:

  • Receipts, tax invoices and proof of payment
  • Logbooks of motor vehicle usage
  • Details of how the number of kilometres travelled for business were calculated; for example diary entries
  • A record of the number of hours worked from home
  • Log of internet data and telephone usage

The ATO has said it will crack down on anyone “copying and pasting” last year’s tax returns, especially for working from home and travel-related expenses. What are people entitled to claim when it comes to work from home claims?

Maree notes there are three different methods for calculating home office expenses, assuming that you are carrying out your usual employment obligations from home and have experienced an increase in expenses as a consequence.

“The first approach is the shortcut method, which can be applied from 1 March 2020 until 30 June 2021,” she says.

“The rate of claim is 80c per hour and covers all expenses including, phone, internet, electricity, gas and the decline in value of furniture and equipment. If you use this method you cannot claim any other working from home expenses.

“The second method involves a fixed rate of 52 cents per hour, which, in addition you can also claim the work-related portion of phone, internet, stationery, consumables and the decline in value of equipment.

“The final process is the actual cost method; under this approach you will claim a portion of expenses incurred, rather than a set rate.”


For those who have relatively straightforward tax affairs and choose to do their own return, what are the main points that they need to be aware of?

Firstly, you will need to wait until payment summaries have been updated to tax ready status on myGov.

“The returns are prefilled with information from health insurance providers and other various sources of income,” Maree says.

“According to the ATO, pre-filling data is available for tax returns from 1 July as they receive it, with substantial amounts available by mid-August. You will need to check the information prefilled against your records to ensure accuracy.”

In addition, the ATO has some handy online resources to assist people to complete their own returns, including occupation-specific guides.


What are some of the traps that people need to be aware of, especially with things like superannuation contributions?

If you are claiming a tax deduction for personal superannuation contributions, timing is everything.

A deductions notice needs to be provided to your fund to be able to claim a deduction. This needs to be completed on or before the day you lodge your tax return (or the end of the next income year, whichever occurs first) and the fund must acknowledge the receipt of the notice.

“From a practical standpoint you will need to assess your taxable position and calculate the optimum amount of your personal superannuation contribution to claim as a tax deduction,” Maree says.

“You will then need to complete a notice of intent to claim a tax deduction and provide it to your superannuation fund; the fund will then acknowledge your intention.

“It is only after receiving the acknowledgment from the fund that you can include the deduction in your return.”


Is there any advantage of doing your tax return early, i.e. at the start of July?

Given that the ATO doesn’t start full processing of tax returns until July 7, Maree says there’s generally no real advantage in getting your return in early.

“Generally, the ATO expects to start issuing refunds from July 16, so there may not be any advantage to lodging returns in the first week of July,” Maree says.

“To get the full benefit of the ATO prefilling returns you may be better off waiting until most of the information is ready at the end of July through to mid-August and filing then.”


What’s the one thing you wish every client would do at or before tax time?

Maree says getting advice from your tax agent or accountant prior to purchasing or selling investments is crucial.

“By talking to us first, we can go through the tax implications of the transaction,” she says.

“There may be tax-saving opportunities that are lost if we are unaware that a transaction is occurring, or worse, has already occurred.”

For more information on our tax service offering please contact Ben Greenwell on 0419 714 697 or via email at bgreenwell@australianunity.com.au

Important information

This information is provided by Australian Unity Trustees Limited ABN 55 162 061 556, AFSL 483220 (AUTL). AUTL is a wholly owned subsidiary of Australian Unity Limited ABN 23 087 648 888. Any advice on this site is general advice only and does not take into account the circumstances, objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain legal, taxation or financial advice relevant to your circumstances before making any decisions. Nothing on this site represents an offer or solicitation by AUTL in relation to securities or investments in any jurisdiction. Whilst every care has been taken in the preparation of this information, it may not remain current after the date on which it is published and AUTL and its related bodies corporate make no representation as to its accuracy or completeness.

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