Do you enjoy rummaging around for missing receipts, bank details and financial paperwork? Lodging your tax return at the end of the financial year is typically a tedious process and it can be tempting to rush through it.
Don’t risk providing incorrect details, forgetting to declare all your income, or missing out on deductions. Use this handy checklist to make sure you’re organised when 30 June rolls around.
Whether you’re lodging your tax return claim yourself or working with a professional, preparing the necessary documents, receipts and information in advance will make the process much less stressful.
It can also help ensure you get the maximum refund available, as you’re less likely to forget about any deductions you may be eligible to make.
Make sure you have the following information at hand:
One of the common mistakes people make on their tax returns is failing to declare every source of income. This includes bank interest, cash from a second job, income from a rental property or investment, government payments and foreign income.
People also get confused about home office claims. You can’t claim the cost of owning or renting your home if you have an office or other place of business, but occasionally work from home. However, you can claim for actual costs incurred, such as a percentage of your utility, phone and internet bills, and depreciation of furniture and equipment.
Remember, if the ATO discovers you’ve made an incorrect claim, you’ll have to repay any tax avoided, and you may also have to pay interest on the amount you owe. The amount of interest will depend on how long the tax has been overdue. Depending on the circumstances, you may also have to pay a penalty of up to 95% of the tax amount.
If you find that you tend to lose track of your expenses, there are several digital apps that can help. You can use these apps to capture and save receipts and deductions as you go and then upload the photos directly into your tax return. That way, you won’t have to spend hours searching for receipts or worry about forgotten expenses.
Alternatively, you could keep a notebook to write down any expenses, or set up an online spreadsheet. Remember to separate different types of expenses – for example, training, accommodation, stationery – as this will make it easier when you’re finalising the details.
If you really want to maximise your return, you may want to hire a qualified tax advisor. Just like when you’re shopping around for car insurance, getting an expert to do the hard work for you could potentially save you both time and money. Do your research online and read reviews and ratings.
Lastly, if you have private hospital cover and earn over $90,000 a year, you don’t have to pay the Medicare Levy Surcharge (MLS). The MLS aims to encourage individuals to take out private health insurance and to help relieve some of the demand on Medicare.
The secret to a seamless tax return process is being organised, and it’s never too late to start. Set up good financial habits now and you’ll thank yourself for it at tax time.
The information in this article is intended for general information only. We recommend that you obtain advice from an independent taxation advisor regarding your own individual situation. iSelect does not compare all products in the market. Not all products are available at all times.