How to lodge your online tax return?

For such a short word, “tax” has the power to strike fear into every one of us. At a minimum, we dread the extensive work of gathering our data and filing each year. All the while, we know that a simple mistake could lead to penalties by the ATO.

Luckily, you don’t have to brave the journey alone. We’re an Australian tax agency service we’re tax experts who are here to help. Start with these top tax tips for getting your highest eligible tax refund when you lodge your tax return online this year.

1. Track Your Expenses All Year

There are so many expenses you have on a daily basis that could be full or partial deductions. Unfortunately, if you wait until tax time, chances are that you’ll miss many of them. To avoid leaving money on the table, track all expenses that have anything to do with work. This includes small supplies and work-related software to name a few.

An easy way to do this is with a receipt tracking app, and there are plenty to choose from. These apps let you snap a picture of each receipt to upload it. They can store and categorise your receipts so everything is easy to find when tax time arrives.

2. Know the Ins and Outs of Claiming Vehicle Expenses

Many Australians don’t know what they can and cannot deduct when it comes to their vehicles. As a result, they deduct nothing at all out of fear of doing something wrong. Let’s start with the basics of what travel is and isn’t deductible.

You can deduct expenses related to using your vehicle for work purposes. This does not include driving between your work and your home. It only includes travel in the course of your working day.For example, driving between your office and client meetings is a deductible type of travel. If you have multiple workplaces such as someone who manages multiple stores, you can deduct the travel expenses incurred between the locations.

How to work out your tax-deductible amount?

There are two ways you can deduct your vehicle expenses. One is to calculate what percentage of your vehicle usage is work-related. For at least twelve weeks, track all your vehicle usage. Log the kilometres for each trip and note the purpose of the trip. This includes personal travel as well as business travel. After the log period, calculate what percentage of your travel was business-related. For instance, you may have driven a total of 1000 kilometres. If 360 of them were for deductible work-related reasons, 36% of your vehicle usage is deductible.

You can now deduct 36% of all your vehicle expenses. That includes yearly depreciation, insurance premiums, repairs, fuel, and registration for instance. Your other option is to use the fixed-rate deduction. You’ll track all of the work-related trips we outlined above and deduct 68 cents for every kilometre for the 2019-2020 financial year.

3. Choose an Economical System to lodge your tax return online

Some people are so nervous about filing their taxes properly that they go against their own interests. They spend hundreds of dollars on tax preparation, so they find themselves with a smaller return after the preparer is paid.

It doesn’t have to be that way. By choosing our online tax lodgement filing software that is both affordable and thorough means it doesn’t cut into your tax refund.

4. Keep All Donation Receipts

Donations are among the most overlooked tax deductions. You donate a few dollars here and a few there. You don’t think to track them because they’re each such small amounts.

Truthfully, each small donation adds up, so everything is worth tracking. Keep your receipts any time you add a donation at the checkout at a store, for example. Don’t forget about subscription donations that automatically come out of your account each month.

5. Make the Right Types of Donations

Speaking of charitable donations, it’s important to know which donations are deductible and which aren’t. No one wants to make a large donation only to realize later that it doesn’t count toward their deductions. First and foremost, the organisation must have DGR status: Deductible Gift Recipient. This means the ATO has approved them investigated them and found them to be a true nonprofit organisation.

Second, your donation must be either money or a financial asset. In other words, you won’t be able to deduct the value of used clothes you donate to the local thrift shop. Third, the donations cannot give you any value. In other words, you can’t deduct the price of raffle tickets or items you purchased at a fundraiser. You can only deduct donations that give you nothing in return.

Finally, each donation must be at least $2 for you to deduct it. If you’re at a store checkout and the clerk asks you to add a donation, you may be better off donating $2 instead of $1.50.

6. Take a Close Look at Your Phone Bill

Some work expenses are easy to recognise, but you may not know that you could deduct a portion of your phone bill too. If you’re like many of us, you use your personal phone to communicate for work at least part of the time. You can deduct a percentage of the bill based on what percentage of your phone use is work-related. You can do this by using at least one month as a guide. Go through the call log and mark which calls are personal and which are work-related. If 25% of the calls are work-related, you can deduct 25% of your bills.

7. Avoid Penalties for Incorrectly Claiming Work Clothes

In their push to get as high of a tax return as possible, many Australians make mistakes regarding their work clothes. Despite the rumours that float around every year, you can’t deduct for every item you wear to work. There are specific criteria your work clothing needs to meet to be considered a deductible expense. In a nutshell, the specific item must be required by your employer and it must be clothing you wear at work only, not on a personal basis.

If your employer requires that you wear a certain colour of clothing, you can’t deduct that clothing. You can only deduct work uniforms or other clothing that is unique and distinctive in nature, which means there is a logo for example and would not be used for personal activities. You can also deduct safety gear that is required for your job if you purchase it yourself. It’s best if the uniform is registered with AusIndustry. If it isn’t, though, you need to be able to prove that the specific item is required attire for your job.

The good news is that for deductible clothing, you can deduct the purchase price as well as the laundry or dry cleaning costs for it.

8. Set Up an Established Home Office

You may already know that if you work from home, you can deduct part of your living expenses. That goes for part-time and full-time home workers. What you may not realize is that working on your couch doesn’t qualify.

To deduct part of your rent or mortgage, electricity, and similar expenses, you need a designated space. You must have a specific room or area of the home that you use 100% for work purposes.

You can then deduct the portion of your bills that apply to that part of the home. For instance, let’s say your home office makes up 10% of your home’s space. You can deduct 10% of your rent, energy bills, water bills, and other essentials.

9. Weigh Your Home Office Expenses Against the Standard Rate

The percentage option is one way you can deduct your home office expenses. Another option is to use the fixed-rate method. Instead of calculating specific percentages, the ATO allows you to deduct 52 cents for every hour you spend working from home. If you’re working 40 hours per week with two weeks of holidays, that’s $1,040.

The key is to calculate your total deduction with both methods and see which one gives you more value. It will depend on how large your home office is, your living expenses, and more. Keep in mind that this also applies to people who have been temporarily working from home due to COVID-19.

10. Choose an Online Tax Service with Actual Guidance

The tax service you choose makes a powerful difference in your refund. Some stick to the bare essentials. Others are truly dedicated to giving you the best refund you can get.

Use an online tool that is made by tax professionals. For instance, Ezytaxback is designed and managed by a team of CPAs who know tax like the backs of their hands. The software is designed to ask all the right questions and ensure that you’re claiming as many deductions as you can.

We take it a step further as well. Our team personally reviews your tax return, looking for more ways to boost your return and checking for errors. This puts more money in your pocket along with the peace of mind that your return is in-line with ATO standards.

Making the Most of Online Tax Returns

Online tax returns are more time-efficient and they’re easy to use on your own. If you use the right tax services, though, they also give you access to true tax professionals from home. To start to get started getting the most you can from your online tax returns, sign-up online to use EzyTaxBack today or feel free to use our tax calculator.

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