Now we are in the new financial year, it’s time to get those tax returns in. We’ve put together 3 tips to make your tax time easier.
- Record Keeping
Try to get your financial information organised. Having details of your income, assets, expenses and deductions ready to go when the time comes can save you a lot of time and stress.
Consider preparing for next year by creating a spreadsheet, using an app or even by keeping a running note on your phone.
- Tax return deadline
Generally, the deadline for lodging your return is 31 October. However as 31 October falls on a Sunday this year, you have until 1 November to lodge.
If you choose to lodge via a registered tax agent, they can generally lodge returns for clients up to 15 May 2022 however, you need to engage them before 31 October.
Using an accountant is an extra cost as opposed to doing your tax yourself, however the benefits of an accountant can often outweigh the cost as it buys you more time to get your return done and they may be able to get you a bigger return.
- Have you been working from home?
If you have been working from home during the pandemic you can access a temporary ‘short-cut’ method to claim home office expenses as a tax deduction. This method is very simple and requires almost no documentation.
For the period from 1 July 2020 to 30 June 2021, you can claim a deduction of 80 cents per hour for each hour worked at home. This covers all work from home expenses such as phone expenses, internet expenses, electricity and gas for heating, cooling and lighting, and the decline in value (depreciation) of equipment and furniture.
You don’t need any expense records, nor do you need to have a dedicated work area to use this method. All you require is a timesheet, diary or payslips that shows the hours worked.
For example, if you worked two days a week from home (say of 8 hours each), you would be eligible for a tax deduction of $12.80 per week. Over 48 weeks, this provides a tax deduction of $614.
If you use the ‘short-cut’ method, you can’t claim any other expenses for working from home.
Aside from the short-cut method, a fixed rate method (52 cents per each hour you work from home) may allow you to claim other deductions, or the actual cost method can be used. For more information make sure to check the ATO’s home office expenses page.
You can use whichever of the 3 methods gives you the best tax deduction, as long as you meet the requirements for the chosen method.