6 tax tips to maximise next year’s refund

Start doing the groundwork for your 2023-24 tax return now.

Millions of Aussies are in the middle of preparing this year’s tax return, so it might seem a little premature to be planning ahead for the 2023/24 tax year too. But, if you want to get the best possible tax refund next year, you need to start doing the groundwork right now.

Here are H&R Block’s top planning tips to maximise next year’s tax return.

 

1. Keep track of your expenses

Put in place a system to record all your workplace expenses. If you spend money on anything as part of your job, get and keep the receipt. Even if you’re not sure if it’s deductible, if you at least have the paperwork, you can get your accountant to advise you when the time comes to do your return.

If you end the financial year with all your receipts, invoices and other records tidily arranged, you’ll immediately be ahead of the game. And, rather than keeping paper copies of everything, take photographs of receipts, etc and store them on your phone. There are plenty of apps that enable you to store all your records in one electronic place (including H&R Block’s ReceiptHub). The Australian Taxation Office (ATO) accepts electronic copies so you don’t need to keep paper versions, which often fade anyway.

Some apps – including ReceiptHub – allow you to download information you’ve stored during the year straight into your tax return. That can save you valuable time and effort.

 

2. Keep logbooks and diaries

Do you drive your car for work purposes? If you use the logbook method, you need to keep a diary for at least 12 continuous weeks to record your work-related journeys. From that, you can then establish a work-use percentage, which you can apply to all your car expenses over the year. If you don’t already have a logbook, think about starting one soon.

If you use the other method of calculating car expenses – the standard cents-per-kilometre rate – make sure you record all your work journeys during the year. That way, you’ll have an accurate kilometre figure to apply the rate against when you come to do your tax return.

3. Keep records of working from home

If you work from home and want to claim the ATO’s fixed-rate method of 67 cents per hour, you’ll need to keep records of all your home working over the course of the year from July 1, which you can do using a diary, copies of timesheets or a staff roster. You also need to keep a copy of a bill or invoice for every category of expense covered by the fixed rate for which you are claiming (for example: heat and light, phone, stationary, etc.). Don’t forget to keep these copies at some point during the year – and, remember, there’s no time like the present.

 

4. If your circumstances change, tell the ATO

Are you planning to get married during this financial year? Or will you be moving house? Tell the ATO before you lodge your return. If you lodge under different details, the ATO won’t be able to match it with your Tax File Number and delays will ensue. Lots of tax returns get held up by the ATO because taxpayers have made this basic mistake.

 

5. Remember to include all your income in your return

The ATO now receives most of your income information electronically from third parties, including most institutions that pay interest and dividends, foreign income from overseas tax offices, PAYG Summaries from employers and pension payments.

This information is used to match what is declared in tax returns. If the income declared is not the same as the income matched, the ATO will query the difference. The items of income most commonly omitted are capital gains (from the sale of shares or property, for instance) and income from overseas, all of which are taxable in Australia if you are resident here for tax purposes.

 

6. An accountant isn’t just for tax time

Many people go to see their accountant once a year, when completing their tax return. But, if you have tax issues during the year, don’t wait until tax time to resolve them. Talk to a tax professional for tax-related help, advice and planning at any time. If your tax affairs can be structured in a more tax-effective way (for instance, if you’re looking at starting a business and want to know how to do it), an early chat with an accountant can make the process easier and can save you tax from the start.

 

article from: au.finance.yahoo.com