Here’s the most common question people ask us in July every year;
“What can I do to get a bigger refund or pay less tax?”
Australians are always looking for ways to improve their refund, which is why we’ve decided to answer this common question with four easy ways to improve your tax refund for 2016.
- Manage your tax receipts
Keeping track of your receipts sounds relatively easy, but a huge percentage of Australians lose track of receipts each year and therefore are unable to remember, let alone claim, specific deductions. Every time you incur a work related expense or make a work related purchase, ensure you file the receipt, documentation or invoice carefully either in a folder, online or in our Etax app. Then, when it comes time to do your return, you’ll have a file with all of the tax deductible items for 2016 in one place.
Need further advice? Take a look at our blog post on easy-to-follow ideas for managing your receipts to save time and save tax.
- Log it
If you ever drive your car for work (not including to and from home), keep track of it. It could pay off in 2016.
Record the kilometres you’ve travelled for work in a log book or diary. It’ll make determining your annual KM’s easier and you’ll have a sturdy copy of proof to backup your claim if the ATO ever asks to see evidence (which they do.) Therefore it’s always a good idea to keep records to avoid ATO fines or penalties.
- Seek the advice of a professional
Did you know that more than 74 per cent of Australians use a tax agent (such as Etax.com.au) to prepare their tax return?
Using a tax agent means you’ve got a qualified professional accountant to review your tax return for you, check that it’s accurate as well as look for extra deductions you could claim to improve your tax refund.
A tax agent helps you avoid trouble with the ATO and helps handle it if any complications arise. A tax agent can also get you deadline extensions that are not available directly from the ATO.
By using a tax agent, you’re also able to claim the tax agent fee next year as a deduction – so it’s a win-win for you.
- Sweat the Small Stuff!
While $3 here or $5 there may not seem like much in the long run, when you add it up across the whole year the small stuff can add-up to improve your tax refund.
For example, keeping track of just $6 worth of expenses per week across a whole year could increase the refund of taxpayer earning $50,000 a year by $100. So you can see how, if it’s a bunch of $30 or $50 receipts you’re forgetting about, you could miss out on $1,000 or more in your tax refund!
Add all work-related expenses to your tax return and you’re well on your way to ensuring you get the best tax refund possible.
One last idea: For more tax-saving tips and ideas about tax deductions, there’s an entire category of helpful “improve my tax refund” posts in the Etax blog.