The end of the financial year is just around the corner, which means that it’s time to start thinking about your tax return (if you haven’t already). Filing an accurate tax return is important, but it’s also worth thinking about what you can claim to minimise your tax liability.
Why you need to submit a tax return
In Australia, if you generate income and have a tax file number, you’ll need to submit a tax return containing your income and expenses for the financial year. According to the Australian Taxation Office
(ATO), reasons you may need to submit a tax return for the financial year include1:
- You’ve had any tax withheld from income you receive
- You’ve made $1 or more of foreign income
- You pay or receive child support
- You’ve made business or investment income
- You’re leaving Australia and have a study or support training loan
Submitting an accurate tax return avoids any potential issues, especially if the ATO decides to conduct an audit of your tax return/s. You can learn more about the ATO’s audit processes on their website.
You may be eligible for a range to tax offsets
Ways you can maximise your tax return
To maximise your tax return, you could claim business-related expenses where relevant andyou may also be eligible for a range of tax offsets depending on your financial situation.
Some of the ways you can maximise your tax return are to:
1. Start early and stay organised
If you’re making business-related purchases, make sure you keep receipts throughout the year. Nowadays, most receipts are digital, so it’s worth gathering up all your receipts for work-related purchases now, rather than when you go to complete your tax return.
2. 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.
3. Understand your eligible deductions and credits
It’s important to know what you can claim as a deduction, and what credits are available. People that work from home, for example, can claim expenses like heating, cooling, and lighting of your home office, while you could also claim travel expenses, equipment costs, education fees and more. You can learn more about the types of deductions you could make on the ATO website.
There are also several tax offsets that can reduce the amount of tax you owe. These include low- and middle-income earner offsets, a seniors and pensioners tax offset, superannuation-related tax offsets and more. Learn more about the types of tax offsets available.
You’ll need to keep all tax records for five years from the date you lodge your tax return.
4. Keep accurate records
As mentioned, your tax records need to be accurate, in case the ATO ever needs to verify the deductions and credits you’re claiming. Ensure you have a filing system you’re comfortable with as you need to keep all tax records for five years from the date you lodge your tax return.
5. 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).
6. 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 deduction, depending on whether the charity is a Deductible Gift Recipient (DGR), what you gave and whether you received anything of value in return. We recommend visiting the Australian Charities and Not-for-profits Commission website as they are the national regulator of charities and referring to their directory could help you avoid making a donation to an unregulated charity.
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.
7. File electronically and use direct deposit
You can now file your tax return online, which makes life easier for everyone. Make sure you request a direct deposit of your tax refund as this is the easiest way to get money, you’re owed from the ATO.
8. Seek a tax accountant if you need professional help
Does the prospect of submitting a tax return feel overwhelming? It’s worth seeking the help of a professional tax accountant if you’re looking to make a series of claims. This is especially important if you’re a sole trader – and you can even claim the cost of using an accountant on your tax return.
Double-check your tax return to ensure you haven’t missed anything.
9. Don’t procrastinate and double-check your tax return before submitting
Don’t leave your tax return to the last possible moment. Get organised now – especially if you need the help of an accountant – and make sure you’ve gathered evidence of all possible deductions and credits before submitting your tax return. Double-checking your return is the best way to ensure you haven’t missed anything.
10. Consider shopping around for the best banking products
Once you’ve received your tax return, you may want to put it into a savings account to help boost your savings. It’s worth thinking about the type of savings account you’re placing your money into – a term deposit or bonus saver account, for example, can boost your return so you can get closer to your savings goal. Our savings accounts and term deposits could help you grow your savings even further.
What are some common tax mistakes and misconceptions?
There are common tax mistakes that people fall into every year –it’s worth knowing what these are, as making these mistakes can mean you’ll miss out on maximising your tax return.
Some common tax mistakes include:
- Relying on the ATO’s information – it pays to double-check the information that’s included in your return as the ATO pre-fill details they already have on you.
- Making up deductions – this can cause issues down the road, so be truthful
- Forgetting to update information like your address or your bank details
- Forgetting to claim any legitimate donations you’ve made throughout the year
- Not seeking professional help – especially if you haven’t filed a tax return as a sole trader before
When it comes to your tax return, it’s worth taking the time to double-check all your information claims. Time is money and taking these extra few steps can put some extra money in your pocket once the return’s been submitted.
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[1] Before you prepare your tax return | Australian Taxation Office (https://www.ato.gov.au/Individuals/Your-tax-return/Before-you-prepare-your-tax-return/)
The information in this article 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.You should seek independent, professional tax advice before making any decision based on this information.
- You should ensure that you’ve confirmed you can claim an expense before including it in your tax return. Reliable sources of information include the Australian Taxation Office (ATO), your accountant or financial planner.
- You have from 1 July to 31 October to lodge your tax return for the previous income year. If you use a registered tax agent to prepare and lodge your tax return, you may be able to lodge later than 31 October.
- The information in this article is subject to change as Tax laws change regularly. For the latest information, check the ATO website or with your accountant or financial advisor.
- Qudos Bank is not a registered tax (financial adviser) under the Tax Agent Services Act 2009. The information provided is of a general nature and doesn’t take into account your personal financial situation – we suggest you seek independent taxation and financial advice before making any decision based on this information.
Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305.
Published, June 2022, updated June 2023
