FINANCE: Top Tips to Increase Tax Refunds

‘Top Tips to Increase Tax Refunds!’ by Miriam Clappis published in Great Health Guide (Aug 2015). It’s that time of the year again where we have to fill in our tax forms. Find out how to increase your tax refund this year!

Read other Finance articles on Great Health Guide, a hub of expert-inspired resources empowering busy women to embody health beyond image … purpose beyond measure.

FINANCE: Top Tips to Increase Tax Refunds

written by Miriam Clappis

It’s tax time… and no one ever says ‘I want to pay more tax!’ Discussing tax deductions is probably my favourite part of helping people with their tax returns. Why? Because deductions means more money in YOUR pocket for YOUR tax refund.

It’s pretty simple, the more deductions you can claim, the more refund you’re likely to receive. What is not so simple, is knowing the ins and outs of the rules to make sure you claim every deduction possible.
That’s where we come in.

Not many people realise that your records can be receipts, as well as bank statements which show the transaction purchase – and also your diary entries.

Now before we go through our top 10 tax deduction tips, it’s important to remember three basic rules:

• You must have spent the money

• It must be related to your job

• You must have a record to prove it.

Let’s go through our top 10 tax deductions that you might be missing out on:

1.Home-office

A lot of people are now working outside of the main office. This means that there are many tax deductions that can increase your tax refund.

If you work from home and have a separate room set up as an office, you can actually claim 34 cents per hour that you work in it. For some of my clients that spend a lot of time outside their main work place, catching up on administration, researching latest articles or preparation for work, this tax deduction certainly adds up over the year.

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2. Internet 

If you’re working from home, then you’re probably using the internet. This means you can also claim a percentage of your internet that you use for your work related tasks. You do need to keep a diary for four weeks in a year, so that you can show when you used the internet for work and for personal use, such as Facebook!

3. Laptop/Tablet

If you’re on the go with your work, working from home or using your own internet, chances are you’re probably using a laptop or tablet to do this. I am seeing an increasing amount of people use iPads for work.  You can actually claim some of the purchase cost of these devices, but if its cost is over $300, then you cannot claim it at all once, it has to be depreciated over time. 

4. Mobile phone

The other area that I see more people claiming is their mobile phones. If you’re using your mobile phone for anything work related – such as emails, calls, texts, or the GPS – you can claim a percentage of your phone bill that relates to work. Mobile phone bills can get pretty high over a year, so this a great one to be able to increase your tax refund.

5. Travel

Have you ever had to travel interstate or overseas for work events such as conferences, meetings or training? Now your employer might pay for flights and accommodation, but if you have made payments too, then you can claim these.  

There are many things that you may still be able to claim that a lot of people don’t know about.  These include travel incidentals, meals, taxis, buses, trains, tolls and parking fees or car hire charges. 

6. Your Car

Now, most people realise that you can’t claim travel to and from your normal office, but a lot of people don’t just work from their office these days. 

You might have to travel to client’s places, meeting suppliers, training days or to other offices where your business operates. This cost may be able to be claimed as deductions and there are special rules which mean you can claim a certain amount per kilometre of travel without having to keep a log book.

7. Charity Donations

Most people make the odd donation here and there at work, but generally lose receipts. Depending on your employer, you might have a charity that you support monthly and there are always colleagues and friends raising money. 

A little trick that I tell my clients is that when you make donations, always try to use your credit or debit card – or try and take a photo of the receipt and email it to yourself. That way, if you’re not good with receipts, you can go through your bank statements or your emails and use that to remind you to claim the tax deduction.

8. Protective Clothing

There are a lot of rules relating to what you can and can’t claim for clothing, so many people get confused and don’t claim anything. Frequently missed deductions include protective clothing or protective shoes such as high visibility clothing (hi-viz), steel cap boots, sun hats, aprons, fire-resistant clothing, sunscreen or sunglasses.  You may also be able to claim up to $1 for each load of washing of these clothes. 

9. Income Protection Insurance

Not all insurances are tax deductible, but income protection insurance is. Income protection insurance is designed to provide you and your family with a continued income if you’re unable to work. This means any premiums you pay can be used at tax time to increase your refund. 

Not only does the income protection insurance give you a bigger tax refund, it also provides you with peace of mind and protection for you and your family if things go wrong and you’re unable to work

10. Overtime Meals

There are certain occupations – such as tradies – that are paid overtime meals if they work over a certain amount of hours in a day. The ATO has a special rule which allows some people who receive overtime meals to claim up to $28.20 per meal without having to keep receipts. So definitely check your payslips and your partner’s to see if you receive overtime meal payments.

I recently helped someone who had never seen an accountant before and they were receiving a meal allowance but didn’t know about this rule and most people don’t. We were able to go back and amend 7 years’ worth of tax returns and claim an extra $15,000 without having to show any receipts to the ATO!

So there you have it! Our Top 10 Work Tax Deduction Tips. It’s important to highlight that all of these tips come with their own special rules. That’s where accountants come in to make these complicated areas as easy as possible to make sure you are getting the biggest refund possible.

If you think there is something you might have missed on your last year’s tax return, give us a call on 1300 541 777 or visit our website and we’re happy to do a review, to see how we can increase your tax refund. If you’re looking for a pro-active Tax Accountant for your tax return this tax time, we’re ready to help you over the phone or at one of our offices.   

News Flash: The Australian Federal Budget in May 2015 changed the method of depreciation of assets with ACCELERATED DEPRECIATION. This means that all small businesses will get an immediate tax deduction for any individual assets they buy costing less than $20,000. (Currently, the threshold sits at $1,000).

This $20,000 limit applies to each individual item. Small businesses can apply this $20,000 rule to as many individual items as they wish. These arrangements start from Budget Night, May 12th 2015 and continue until the end of June 2017.

Author of this article:

Miriam Clappis is a CPA and founder of Flinders Accounting, dedicated to providing quality and affordable accounting, tax, superannuation, savings, home loans and insurance advice to people across Australia. Connect with Miriam on Facebook or email.

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