It’s almost 30 June, which means it’s time to start thinking about lodging your tax return. This mightn’t be something you’re looking forward to, but by putting some effort into preparing your return this year, there could be a nice silver lining – getting a tax refund from the Australian Taxation Office (ATO).
It can be difficult to know what you might be entitled to and how best to prepare your tax information, so to help you put more money back in your pocket, here are seven top tips to maximise your tax refund.
1. Consider using a tax agent or accountant
If you’re not sure what you’re doing, or this is your first tax return, it could be a good idea to get help from a registered tax agent or qualified accountant. They can walk you through every step of filing your tax return (or even complete it for you), to make sure you claim all the deductions you’re entitled to.
2. Understand which work-related expenses you can claim
You may be able to claim some work-related expenses3 as deductions. It’s worth spending some time on the ATO’s website to make sure you fully understand what you can and can’t claim.
Generally speaking, to claim a deduction for work-related expenses, the expense must be directly related to earning your income and you must have a receipt or record to prove it when lodging your tax return. This could include education, home office and motor vehicles expenses and more.
3. Review your tax deductions related to working from home
Ever since COVID-19 hit in 2020, you’re likely to have been working from home more than usual. If you’ve incurred additional expenses as a result, you may be able to claim some of these against your income.
This could include internet, phone, depreciation of laptops and office furniture and electricity expenses2. Again, it’s best to check the ATO website to see what you can and can’t claim as a work-related expense.
4. Consider car and travel expenses
Do you need to drive as a part of your job? Good news - you might be able to claim motor vehicle expenses to maximise your tax refund.
Keep in mind, if your travel is partly private, you can generally only claim the work-related portion. Just make sure you keep all your receipts for work-related motor vehicle expenses (or you may be able to keep track of your odometer in a valid logbook). The ATO website has some great information about the evidence you need to maintain to claim car expenses1.
5. Keep track of your charitable donations
If you’ve given to a charity during the last financial year, you may be able to claim the amount as a deduction4, depending on whether the charity is a deductible gift recipient (DGR), what you gave and whether you received anything of value in return.
To claim them, you’ll generally need to have evidence of gifts given, such as a receipt or a letter from the recipient confirming the amount given.
6. Ensure you keep records
In most cases, you need to keep records for 5 years from the date you lodge your tax return. Records are written evidence of your income or expenses and can be in paper or electronic form.
The ATO has a handy myDeductions5 tool in the ATO app to track your deductions so you don’t lose out on your refund. This might be helpful to you to ensure you have proper records.
7. Consider using your tax refund to pay down debt or boost your savings
It’s a good idea to maximise your tax refund by claiming all the tax deductions you’re entitled to. But what about once you’ve received your refund?
You could consider continuing to make the most of your tax refund by paying down debt, boosting your savings or putting it in a term deposit. Doing this every year could help you become financially secure, retire a little earlier or just enjoy an extra holiday in the future.
Keen to put your tax refund to work? Check out Qudos Bank’s full range of savings accounts and term deposits^.
^ Interest can be payable monthly (standard terms only), or at maturity (terms <12 months, including special terms) or annually and at maturity (terms>12 months). Standard terms are available for 3, 6, 9, 12, 24 and 36 months. Special terms available for 5, 7 and 11 months.
You may withdraw or transfer the balance of your term deposit early by giving us 31 days notice. However if you do, we will reduce the interest on the term deposit from the date it was opened until the date of withdrawal or transfer by 2% per annum, or the term deposit rate if it is less than 2%. We have the discretion to delay the withdrawal or transfer until the end of the notice period (but not beyond the maturity date). If you have already been paid interest, the reduction will be deducted from the balance of the term deposit.
Before opening an account with us, you should read our Terms and Conditions for Savings Accounts and Payment Services, Supplementary Terms and Conditions for Term Deposits and Financial Services Guide.
As the information in this blog is of a general nature and has been prepared without considering your objectives, financial situation or needs, before acting on the information, consider its appropriateness to your circumstances.
Published, June 2022