5 easy ways to boost your tax return

Tax time is here and for many Australians a tax refund can’t come soon enough.

I am a big fan of tax time! Sure, it means knuckling down to complete a tax return, but the payoff can be a juicy tax refund.

The Australian Taxation Office (ATO) sets firm rules around what we can – and can’t – claim on tax. So, the golden rule is always to toe the tax man’s line. Fudging deductions or understating your income can result in serious penalties. Besides, who needs the stress of a “please explain” from the ATO?

A better strategy is to consider these five steps that can boost your refund.

1. Working from home? Claim the cost

The pandemic may be (mostly) behind us, but around two in five workers are still spending at least part of the week working from home.

If that sounds like you, you may be able to claim work-from-home costs.

The simplest option can be the fixed rate method. You don’t need a dedicated home office, though you will need a record of total hours worked from home for the entire financial year. Multiply the hours by 67 cents per hour to arrive at the amount you can claim.

Woman working from home.

As a guide, if you’ve spent 100 hours working from home, you may be able to claim $67 in your tax return.

Alternatively, you can claim the actual cost of working from home. This may work out better for you if you faced higher bills, such as a bigger phone bill, because you worked from home. You’ll need to have records showing how much you spent on these expenses and the portion that relates to work.

2. Stock up on work-related items

Before June 30 is the time to take a look at any work-related equipment you own and decide if it could do with an upgrade.

You can usually claim an immediate tax deduction for work-related items costing $300 or less.

If your briefcase or laptop bag is looking a little worse for wear, or your calculator is on the blink, it can be worth upgrading before June 30. The item needs to be in your hands and ready to go – not just on order – by June 30 to claim a tax break.

Hang on to the receipt as proof of payment. And if the boss reimburses you for the cost, you can’t claim the expense in your personal return.

3. Thinking of selling investments? Pause for a moment…

If you’re planning on selling investments, maybe a rental property, shares or even cryptocurrencies before June 30, it could be worth delaying the sale until the new financial year.

Stage 3 tax cuts that kick in from July 1, 2024, will see many of us save on tax. This doesn’t just mean an uptick in take-home pay. It also brings the potential to pay less capital gains tax (CGT) on any profits made on the sale of investments.

That’s because CGT is not a separate tax. Capital gains are added to your regular income and taxed at your marginal tax rate. Lower tax rates from July 1 could mean saving on CGT. It’s worth a call to a tax professional to know how the upcoming tax cuts will impact you.

Woman working on her tax.

4. Show your super some love

I know plenty of Australians are doing it tough right now. But if you can afford it, think about adding a bit of extra to your super before June 30.

You may be able to claim a tax deduction for personal super contributions worth up to $27,500 in the 2023-24 financial year (this figure includes your employer’s compulsory contributions plus any salary sacrifice contributions).

You may also be able to carry over any unused portion of before-tax (concessional) contributions from the past five years, as long as your super balance is less than $500,000.

There’s a lot to be said for being able to claim a tax deduction for growing your investments, and deductible contributions to super don’t have to be big to make a worthwhile difference to your future financial wellbeing.

5. Speak with a tax professional

Most of us are comfortable shopping, banking and investing online. But when it comes to doing our tax returns, the majority of Australians turn to a tax agent rather than using the ATO’s online service myTax.

That said, there are good reasons to use a registered tax professional. I’ve come across research showing that people who have their tax return completed by a tax agent can pocket more of a refund. This may be because tax agents are on top of the wide range of deductions applicable to different jobs. They can also let you know if something you’re planning to claim is a no-no.

Even better, the fee charged by a registered tax agent to prepare your current year tax return can be claimed on tax next financial year.

If you have simple tax affairs and earn $60,000 or less, the ATO’s free Tax Help program can help you lodge your tax return online. Call 13 28 61 for details.

Woman looking at a tax return.

A bonus tip…

Take it slow. Have all the details. Get your return right.

Don’t be in too much of a rush to lodge your tax return. It’s better to take it slow and get things right the first time around.

Last year, some pre-fill details (such as interest earned on savings accounts) weren’t available until mid-August. Overlooking these details can just delay your refund. Worst case scenario – it could result in you being slugged with penalty charges.

If you’re facing financial hardship, you can request priority processing of your tax refund. Lodge your tax return first, then phone the ATO on 13 28 61 to discuss whether you are eligible for fast-tracked processing

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