Table of Contents
1. Manage Your Receipts
Accountants know that one of the simplest ways to maximise your tax return is to keep track of your receipts. This allows you to easily provide evidence when it comes time to make your deductions. For example, any time you cover a work-related expense or make a purchase that you need for work, you need to keep track of it.
Does your office take care of all your supplies, or do you provide some? If you provide anything from pens to a coffee machine, make a note of it. Additionally, you’ll need receipts when you are showing a donation made, membership fees paid, home internet costs, and even the bill for hiring a tax professional. All of these are part of deductions you could be missing out on if you don’t keep track of your receipts.
Managing your receipts effectively can significantly impact your tax return. Insight Advisory Group recommends using both physical and digital methods to store your receipts. This dual approach ensures that you have backups in case one method fails. For instance, you can keep a physical folder for all your paper receipts and use a digital app to scan and store them electronically. This way, you can easily access and organize your receipts, making the tax filing process smoother and more efficient.
2. Stay Organised Year-Round
Instead of running around at the end of the year trying to find receipts, make sure you have a designated spot to keep receipts and a digital folder where you can scan and save all your receipts in one spot. Another easy way to get organised is to download an app that logs and keeps track of receipts.
The ability to take a quick picture of the receipt as soon as you make the purchase or finish an online transaction will help you find them come tax time. One such app is Etax, which is easily downloaded for both iPhones and Androids. The app allows you to categorise, record, and add notes. Plus, it’s all in one spot to help during tax time and is a great way to maximise your tax return.
Staying organised throughout the year can save you a lot of stress and time when tax season arrives. Insight Advisory Group’s accountants suggest setting up a routine for managing your receipts and financial documents. For example, you could set aside a specific day each week to review and organise your receipts. This habit ensures that your records are always up to date and reduces the likelihood of missing out on potential deductions. Additionally, using cloud storage for your digital receipts can provide easy access from anywhere and protect your data from loss or damage.
3. Get the Basics Right
This may be obvious to some, but make sure you are checking all your basic information. Simply by checking over your details, you could make the process quicker and maximise your tax return. Sometimes you can have a blind spot if you are not fully paying attention to the basics of filling out the details for the ATO form. The basics include getting your details up to date with the ATO, double-checking your bank details are correct so your funds reach the right account, making sure you spell everything correctly in all areas of the form, and ensuring your address matches between the ATO and your tax number so it is directed to you.
Insight Advisory Group emphasizes the importance of accuracy in your tax filings. Small errors, such as misspelt names or incorrect bank details, can lead to delays or even rejections of your tax return. To avoid these issues, take the time to review all your information carefully before submitting your tax forms. If you are unsure about any details, consult with a professional accountant who can help verify your information and ensure everything is correct. This attention to detail can help you avoid unnecessary complications and maximise your tax return.
4. Keep a Mileage Log
Another simple way to increase your tax return is to keep a mileage log. Lots of people understand that you can claim mileage on your car, as long as you don’t already get reimbursed at work. However, you might miss some of the other expenses that also are tax-deductible, such as the depreciation of the car, registration, insurance, and cost of keeping it running, including fuel, oil changes, and other services. But to take all these deductions as well as mileage, you’ll need records to back up what you claim. Keeping an extremely detailed logbook is the best way to get “mileage” out of your miles and can maximise your tax return if you are doing it correctly.
Insight Advisory Group advises using a dedicated mileage tracking app to simplify this process. These apps can automatically log your trips, calculate distances, and generate detailed reports that you can use for your tax deductions. By maintaining accurate and comprehensive records, you can ensure that you claim all eligible expenses related to your vehicle. This not only maximises your tax return but also provides a clear and organised record in case of any audits or inquiries from the tax authorities.
5. Find All the Claims
People miss opportunities all the time to claim deductions. There are those for your career — for example, most people know about education deductions, but what about theatre and film tickets for an actor? And don’t forget about the deductions for working from home. For instance, you can look into deductions for office furniture, phones, a portion of monthly bills (such as heating and electric as well as internet), and even part of the mortgage payment. However, keep in mind some of these deductions depend on having dedicated office space that you claim to use when working from home.
Insight Advisory Group highlights the importance of being thorough when identifying potential deductions. Many taxpayers overlook deductions simply because they are unaware of them. To avoid missing out, take the time to research all possible deductions related to your profession and personal circumstances. Consulting with a professional accountant can also help you uncover less obvious deductions that you might qualify for. By being diligent and informed, you can ensure that you claim all eligible expenses and maximise your tax return.
6. Track Those Donations
If you donate to charity regularly, a simple way to increase your tax return is to keep receipts. Don’t forget to track any donations made throughout the year. Throwing some change in a donation jar doesn’t count, but full-fledged, write-the-check donations to charities do, even if they aren’t huge amounts. Make sure you get a receipt or letter noting your donation amount and where you donated.
It might be a good idea to check into whether the charity has Deductible Gift Recipient status and, most importantly, if you received any benefits from the donation. The following charity-related purchases do not count for donations: raffle tickets, purchasing tickets for fundraisers, buying items sold as a fundraiser, membership fees, and winning and paying for auction items at a charitable event. There could be even more, so it’s best to check before you try to claim it as a donation.
Insight Advisory Group recommends keeping a dedicated folder for all your charitable donation receipts. This can be a physical folder or a digital one, depending on your preference. By organising your donation records, you can easily access them when preparing your tax return. Additionally, regularly reviewing your donations can help you plan your charitable giving more strategically, ensuring that you maximise your tax benefits while supporting causes you care about. Remember to verify the deductible status of the charities you donate to, as only donations to eligible organisations can be claimed on your tax return.
7. Seek the Advice of a Professional Accountant
The last piece of advice will help you more than anything else — consider using a professional accountant, or at least tax software. An accountant (or even software) knows the right things to ask for, where to look for additional deductions, how to handle any tricky tax issues you might have, and how to plan for the coming years. Seeking the help of a professional will allow you just to turn over all those receipts, paperwork, and records you keep and let their experience guide you in the best way to complete your taxes. Trained professionals know how to expand the claims and help you maximise your tax return for the year. And don’t forget peace of mind!
Insight Advisory Group’s Accountants strongly advocate for seeking professional advice when it comes to tax preparation. A qualified accountant can provide personalised guidance tailored to your specific financial situation, helping you navigate complex tax laws and identify all possible deductions. Using professional services can also save you time and reduce the risk of errors on your tax return. If hiring an accountant is not feasible, consider using reputable tax software that offers comprehensive features and support. These tools can simplify the tax filing process and help you achieve the best possible outcome for your tax return.
Read more on this MoneyMag.com.au article.
