18 May 2013
Before you invest the time and energy in completing an Australian tax return – ask yourself do I have to file a tax return? What documents do I need to complete my return? Then the questions are – am I completing it correctly? and getting the best refund? Here are some tips on completing your Australian tax return!
Do I need to complete a return? – if you receive salary and wages or your taxable income was more than $18,200 (from 1 July 2012 onwards) then generally you will need to lodge a tax return. If you are unsure check the Australian Taxation Office (“ATO’s”) website’s online decision tool that can assist.
Tax Return Papers – The tax return papers you will need include your group certificate, interest statements from the bank, private healthcare certificate. A good reference point is to look at last year’s tax return and see what you need for your tax return.
Use Etax – if you have a simple return you can download Etax from the ATO website and lodge your return electronically. This means that the refund that you are due can be processed quicker so you get your money quicker! Note that the ATO has not as yet developed Etax that is compatible with Macs!
Use the pre fill option on Etax – you can prefill certain information using the Etax software such as salary and wages information, bank interest which makes completing your Australian tax return easier and quicker as you will need fewer tax return papers. The ATO have this data and will match it against your tax return anyway to ensure your return is correct!
Tax Agent – If you are going to have to pay tax, consider using a tax agent to lodge your income tax return. This could result in you lodging your tax return later than the normal lodgment date of 31 October and therefore paying tax later!
PAYG Instalments – if you have to make PAYG instalments (ie pay tax instalments throughout the year) you may wish to consider varying your instalments which benefits your cashflow, however, you will need to be able to estimate your tax for the year!
Donations – make sure you claim your donations made during the year – you can claim a tax deduction for every donation of $2 or more and the charity should provide you with a receipt that you should retain.
Healthcare rebate – make sure that your health fund is giving you the tax rebate upfront otherwise you can claim it in your Australian tax return. Depending on any changes in your income you may wish to reconsider whether its worthwhile maintaining your private healthcare.
Subscriptions – have you paid any work related subscriptions? If so, then generally you can claim a deduction for these in your tax return. If you are unsure ask an expert.
Work related deductions – ensure that you claim your work related deductions – generally for deductions less than $300 no receipts are required, however, go over this limit and you will need to substantiate the full amount.
Travel – driven anywhere for work? If so then you maybe able to claim a tax deduction for the costs you have incurred. You should keep records to support your travel deduction, reduced tax papers are required if you use the cents per kilometer method and claim less 5,000 km’s travelled.
Prepay interest – if possible pay interest early (ie pay interest due in July in June) to accelerate your tax deduction – you still have to pay the interest but you may be able to get the benefit of the tax deduction up to a year earlier!
Rental property – have you ensured that you have all the documentation and receipts in relation to your rental / investment property?
Superannuation contributions – have you considered whether it is worth making superannuation contributions prior to the tax year-end? Certain superannuation contributions maybe able to be claimed as a tax deduction. You should seek professional advice when making decisions about superannuation contributions.
Education expenses – Often people don’t claim what they are entitled to! You can claim things like computer and internet costs as well as books and stationery but this is capped at $2,000 per annum from 1 July 2013!
Lodge your Australian tax return on time! – it may sound simple but lodging your return on time is taken seriously by the Australian Taxation Office and the more often you lodge your return late, the more chance you have of receiving an unwanted call from the Australian Taxation Office.
Seek help – If you are unsure get good professional advice – like most things you get what you pay for and spending some money (its tax deductible) could save you money! Getting good professional advice is important if you are unsure or uncertain about your obligations or whether an amount is taxable.
- David Prichard is a Partner with ESV Chartered Accountants.
Ph: (02) 9275 0249
55 Market Street, Sydney, NSW 2000
- The above is generic in nature and should not be taken as being professional advice (either tax or financial planning advice). You should seek your own professional advice that is tailored to your own personal circumstances when both completing your tax return and when considering making superannuation contributions.