With the end of the financial year approaching, many Australians are preparing to lodge their tax returns. However, rushing the process can lead to missed deductions and a lower refund. According to H&R Block director of tax communications Mark Chapman, taxpayers often overlook legitimate claims that could save them hundreds of dollars.
Commonly Missed Deductions
One of the most frequently overlooked categories is work-related expenses. Chapman notes that many employees fail to claim costs for uniforms, tools, and equipment required for their job. For instance, a tradie might forget to deduct the cost of safety boots or a laptop used for work purposes. Similarly, home office expenses, including internet and electricity, are often underclaimed.
Another area where taxpayers miss out is self-education expenses. If you are studying a course that maintains or improves your current job skills, you may be eligible to claim tuition fees, textbooks, and travel costs. However, the course must be directly related to your current employment, not a new career path.
Record-Keeping Is Key
The Australian Taxation Office (ATO) requires evidence for all claims. Chapman emphasises that without receipts or records, you cannot substantiate your deductions. He advises keeping a logbook for vehicle expenses and maintaining digital copies of receipts using apps or cloud storage. The ATO’s myDeductions tool within the myGov app allows taxpayers to record expenses throughout the year.
For those with investment properties, common mistakes include failing to claim depreciation on assets like carpets and blinds, or incorrectly apportioning expenses for periods when the property was not rented. Chapman warns that the ATO is cracking down on rental property claims, so accuracy is crucial.
Changes for This Year
This financial year, the ATO has introduced new measures to target incorrect claims. Work-from-home expenses can now be claimed using a fixed rate of 67 cents per hour, which covers all running costs. Previously, there were separate rates for different expenses. Chapman says this simplifies the process but warns that taxpayers must still keep a record of hours worked from home.
Additionally, the low and middle income tax offset (LMITO) has ended, meaning many taxpayers will see a smaller refund. Chapman advises not to rely on a big refund and instead focus on maximising legitimate deductions.
Seek Professional Help
While DIY tax returns are possible, Chapman recommends consulting a registered tax agent, especially if you have complex affairs. A professional can identify deductions you might miss and ensure compliance with ATO rules. The cost of using a tax agent is also deductible in the following year.
In conclusion, taking time to review your expenses and seek advice can significantly boost your refund. Don’t let haste cost you money.
