Claiming Tax Deduction: Get the Best Tax Refund Possible

Australians lose hundreds of dollars annually because they forget to keep the papers for things they can write off or deduct. Tax refunds are like Christmas in the spring and you shouldn’t miss it. If you have more money in your bank account, you can plan to go on a shopping trip, pay off debt, or save the refund. Most Australians can raise their tax refund in several ways, which is good news. People who didn't get the most out of their tax returns lose millions of dollars yearly, which can be avoided. In our previous blog, we discussed how businesses and individuals can navigate tax complexities in Australia. This will give you the background knowledge on how to file your taxes without fear. Now, let's find strategies to get your biggest tax refunds this year. 

What Deductions can you Claim on your Tax Return in Australia?

For your 2024 tax return lodgement, you should take note of these deductions to maximise your tax refunds.

1. Superannuation expenses

Individuals (up to 75 years old) can claim a deduction for payments made to complying superannuation funds, no matter how many work-related activities they have. If a person's total superannuation contributions in a year, including employer contributions, are more than the annual "concessional contributions cap" of AUD 27,500, they don't have to pay extra tax. Instead, they must include the additional amount in their taxable income and get a 15% tax offset.

Someone whose total superannuation balance was less than AUD 500,000 at the end of the previous financial year may be able to roll over the amounts of the unused concessional contributions cap for five years. This way, they can contribute more than the concessional contributions cap in later years.

2. Working from home expenses

Many workers now work from home or in a hybrid setting. It's essential to know the rules about what is tax-deductible, as the rules have changed. For instance, during the pandemic, workers could quickly get 80 cents for every hour they worked from home, and they didn't have to keep a journal of proof of home office costs. People who work from home can now choose between the actual cost method and the revised fixed rate method. With the actual cost method, you claim for the real-time you work from home. For the second way, you need to keep very detailed notes.

You don't have to spend all of your work week at home or have a separate home office to get a tax break for working from home. You can deduct your heating, cooling, and lighting bills and the costs of home office supplies like computers, printers, phones, and laptops. You can also deduct the cost of phone calls, the internet, and office furniture like desks and swivel chairs that lose value over time. You can only claim the expenses for the time you worked at the dining room table if you work from home. In addition, you can file a claim for computers, cell phones, internet connections, and other tools you used to do your job. You can claim rent for the part of the house your home office takes up if you have one.

3. Phone expenses

Do you use your phone to work? You are eligible for a tax break! It's enough to show that you paid for these things and have proof. If not (or if the cost wasn't incurred), remember to use devices like smartphones for personal reasons. Just split any time spent between work and fun as required by law. This way, both types of time will be counted when determining the deductions you can get for data cables or phone services.  

4. Donations and gifts 

You can get a tax break for giving gifts or money to groups that are "deductible gift recipients," like your favourite registered charity. You can't claim any amounts for gifts or handouts that give you something in return, like raffle tickets or dinners to raise money. If you presented at least $2 to a bucket collection, you can claim up to $10 without a ticket.

5. Magazines, newspapers, and TV subscriptions

It's good to know that the government will pay you to watch your favourite show online the next night. Sad to say, not quite. You can claim paid TV subscriptions, papers and journals if you need them to stay up to date in your field if you work in the media or a related field. 

6. Tax advice fees

You can deduct costs you must pay to handle your taxes, like the fee to file through a registered agency. The costs you incur to file your tax return and activity statements are tax-deductible. These costs include getting tax guides and software to help you fill out your return. The ATO's website has a complete list of expenses that can be deducted.

7. Clothes cost

You can get your money back if you buy protective clothing, a work outfit, or clothes specific to your job. Regular clothes you buy and wear to work are not included. You can also deduct the cost of doing your laundry and dry cleaning for these things.

8. Self-education expenses

For things like hobbies, professional development, and education, you can only claim costs that are directly related to your present job:

• The course should help you keep up with or improve the skills and knowledge you need for your current job.
• It is likely to make you more money or will make you more money.

If you're using an item for multiple reasons, you can only remove the part related to your self-education.

9. Travel costs

Sometimes you have to stay somewhere overnight for work, which means you have to pay for travel costs. In addition to food and drinks, it covers the cost of lodging. Extra expenses related to the nighttime trip are also tax-deductible. If you use your car for work, you can claim all of the expenses that come with it, including the petrol. This needs to involve driving from one place of work to another, like going to several sites in one day. Many people think you can claim the cost of driving from home to work daily, but that's not true. Although you worked late and no public transport was available, that is still private travel.

8 Ways to get the Best Tax Refunds and Claim Deductions 

One of the easiest ways to get a bigger tax refund is to use the benefits and deductions you are eligible for. Here are our best tax tips to help you get the most money back from your taxes.

1. Have proof for everything 

The ATO likes it when you have proof to support your claims. Therefore, get your bills, receipts, payment summaries, and bank accounts together. After that, take a break and work on your tax return. We've all seen those annoying receipts, but you must keep them if you buy something for work, even if it's just for fun. Another important thing to note is that you don't need receipts for work-related costs that don't add up to $300. You may not need a ticket when you spend up to $300, but you must have spent that money on something related to your job; you can't just claim $300. You can find out more on the role of recordkeeping in maximising your tax returns. 

2. Claim Work-from-home expenses  

Working from home deduction is one of the most important refunds you must not miss. One in every three people in Australia puts in at least some of their workweek from the comfort of their own homes. If this describes you, there is a good probability that you will be able to claim a part of the costs associated with your phone, internet, and power bills. You can also claim the depreciation of certain pieces of equipment, such as a chair and a desk. You should use the home office expenditures calculator provided by the ATO if you are unsure of the amount you are eligible to claim.

3. Claim as many deductions as you can

The most straightforward and common approach to getting a higher tax refund is taking advantage of tax deductions. According to the law, you can submit a claim for a deduction for any expenses related to your job that your employer has not yet reimbursed you for. You can't take a deduction for the expense if your employer has already reimbursed you for payment of the expense.

4. Get rid of the investments that are running a loss

If you have made money through investments or if you have sold shares, you will be liable for paying taxes on the income that you have earned. Therefore, the most effective technique for reducing the overall amount of payable taxes is to make an effort to eliminate any assets already operating at a loss. 

If specific circumstances are satisfied, the terms "capital loss" and "capital gain" may be subtracted from one another. If you want to sell shares now trading at a loss and repurchase them in the next tax year, however, you should exercise caution to avoid any potential financial consequences. 

5. Use your new qualifications to your advantage  

You are eligible deduct the expenses incurred by attending classes directly related to your current job; nevertheless, some restrictions must be met. For example, if you are a hairdresser, you might be entitled to deduct the expenses you incurred to attend a conference on hair care products. If, on the other hand, you are an electrician considering switching careers to become a zookeeper, you will not be able to avail yourself of a tax benefit for doing a course on animal welfare.

6. Be honest

The act of asserting that you are entitled to everything makes perfect sense. On the other hand, the ATO is interested in whatever you have to say about the money you have earned. You must include all of the income you get on your tax return, including dividends on shares, interest on savings accounts, and even capital gains from the sale of an investment.

The ATO utilises a data-matching technique to detect income that has been neglected. You may be subject to penalty charges and interest on any tax that has not been paid. On average, getting it right the first time is more cost-effective.

7. Make a donation

You can lessen the amount of money you owe in taxes while simultaneously contributing to a cause that is important to you! In isolation, a contribution of twenty dollars to a charitable organisation or purchasing a ten-dollar book appears insignificant. 

Nevertheless, when these very insignificant purchases are tallied over a year, they might eventually amount to hundreds of dollars. If the sum exceeds $2, you can claim an exemption. However, you must keep the receipt for your records.

8. Hire an expert

One of the best ways to ensure that you are claiming everything to which you are entitled is to consult a qualified tax agent. The cost of this consultation can be deducted from your return for the following year. You must have everything set out by the 31st of October if you intend to meet with a tax agent for the first time or are switching to a new one. This additional income in your bank account could bring you closer to purchasing your dream property.

Conclusion

To avoid potential complications, entrusting intricate tax concerns to professionals is best. You may be able to complete your taxes appropriately. It is possible, however, that a knowledgeable tax professional will be able to find you sufficient refunds to cover the cost of their services and even more than that. You can have more peace of mind knowing that you won't have to deal with the paperwork associated with your taxes on your own. 

The Kalculators is a great tax company for Australians looking to maximise their 2024 tax returns. We help people to make informed financial decisions by providing detailed advice on claiming deductions and navigating the complexity of the tax system. With our expert advice, you can confidently maximise your tax refunds and improve your financial well-being.

Frequently Asked Questions

How much is the Australian tax refund?

The typical tax refund for Australian taxpayers is AU$ 2,600, so it is highly recommended that you check out our online tax calculator. Now is the time to use our Australian tax refund estimator, and you will be one step closer to receiving your tax refund from Australia.

How can I go about claiming your tax deductions?

To be eligible for tax deductions, you must record your expenditures and verify that they are directly connected to income generation. If you provide specifics about your expenditures in the proper sections of your tax return form or through your tax agent, you can claim these deductions when you file your tax return.

What kinds of records do I need to claim my tax deductions?

Keeping records of your expenses, including receipts, invoices, bank statements, and other pertinent documents that provide evidence of your expenditures, is critical. The Australian Taxation Office (ATO) may conduct an audit, and these records will serve as proof to support your claims.

Are there any restrictions on the amount of tax deductions that can be claimed?

When it comes to claiming tax deductions, there are, in fact, specific restrictions and eligibility requirements to meet. The expenses you claim must be tied to the revenue you produce, and you are not allowed to claim private or personal expenses. To make matters worse, the Australian Taxation Office (ATO) may impose certain criteria or thresholds on certain expenditures.

In what circumstances should I hire a tax expert while claiming tax deductions?

It is highly recommended that you seek the guidance of an experienced tax professional or accountant if you are dealing with complicated tax issues, have many sources of income, or are confused about which costs you are eligible to claim. In addition to ensuring that you conform to Australian tax rules, they can provide individualised assistance and assist you in maximising your tax deductions.

When should I anticipate receiving my refund from the government?

In most cases, refunds are distributed fourteen days after you electronically filed your tax return or forty-two days after the date you file your paper return. Investigate why your refund can be delayed or might not be the amount you anticipated if it has been longer than planned.