It isn’t often that you wake up with a big wad of cash in your pocket. But when it comes to tax return time, that’s actually what you get.
Sure, you might have to put a few papers together, but tax time is the one time of the year you can get some quick cash – and put it towards something you really want, like a much-needed overseas holiday.
It’s too good to pass up.
And here’s the thing: you can make tax time even better. Claiming work related expenses is a great way to reduce your taxable income – the amount the ATO actually taxes – and overall, pay less tax.
It’s too bad some are leaving cash on the table. According to a national survey undertaken by Officeworks, not only are many Australians not getting the most out of their refund, young people are missing out– 59% of 18-24 year olds only claim up to the $300 threshold amount which requires no invoices or receipts.
It’s young people who need cash the most. With many of them saving up for a home deposit and unable to access many types of quick finance, a well-needed cash boost such as a tax return can be a life-saver.
Tax deductions are a great way to get some of that cash in an easy way.
Australians claim about $20 billion in work-related expenses each year. Now, while some industries have their own specific deductions – real-estate agents claimed, on average, $8,000 in work-related expenses in 2013 – there are still claims everyone can make.
When claiming your deductions, there are just a few rules to keep in mind:
- You need to have spent the money yourself, and not have been reimbursed
- The expense must be related to your job
- You need a record to prove it
Here are some hidden gems you need to keep in mind when you’re doing your tax come July.
Working from home? The ATO has you covered
Do you work from home? In fact, do you spend any time working out of a home office? Then you could be eligible for deductions.
The ATO allows for you to deduct expenses relating to the upkeep of a home office, including any utilities, rent, and internet expenses related to the running of your business.
Now, this might sound complicated, but don’t worry, it’s actually pretty simple. For instance, if you have a dedicated home office, all you need to do is figure out how big the floor plan is in relation to the entire property. (Your real estate agent may be able to help with this!)
And when it comes to internet use, all you need to do is keep a diary for a few weeks so you can prove how much time is spent on business, versus personal use. You don’t even have to keep a diary for the full year – just a few weeks.
By the way – you can also claim depreciation on the equipment in your office, and the ATO allows for deductions in maintaining a “professional library” of books and publications, as long as it’s associated with your industry.
Bought a laptop or a projector and use it for work? You’re able to claim the depreciation on both over a certain amount of time.
You can even claim costs for smartphones, tablets, and other tech that costs more than $300. Just be sure that you’re really using it for work!
If you’ve taken a course to increase your skills in your profession, then you can deduct it. That includes seminars or conferences, too.
You just have to make sure the function of the course is to help you in your current job.
Given some cash to a legitimate charity? Deduct it. But remember, you still need to have the record of your deduction.
And not every charity is able to have deductions claimed against it. Head to the ATO website to check out which charities are on the official list, and which aren’t – it can change every year.
You can claim travel if you’re going to a client site, if you had shifting job sites, or if you travelled to somewhere irregular first, and then back to the normal place of work.
If you’re using a car, you can use different methods to work out your expenses – using cents per kilometer, 12% of original value, one-third of actual expenses, or by using a log-book.
Paid an accountant to do your tax? Claim it.
Do you maintain a uniform for work? Protective clothing, or even occupation-specific clothing that isn’t a uniform? Then you can claim the cost of buying and maintaining that clothing, including repairs.