The end of financial year brings to mind two things, stock clearance sales and tax returns. Depending on how organised you have been in the past year or so, doing your taxes can be a stressful hassle or a pleasant boost to your savings.
Getting all your receipts and paperwork in order is a good start but unless you know all the things to claim, you may be missing out on hundreds of dollars every year. If you do some research, you can make sure that you get the most out of your tax return.
Officeworks recently researched Australian’s tax claims and found that most of us miss out on an average of $426 in unclaimed tax every year, which works out to about $1.65 billion nationwide.
The team here at Alpha Finance has put together some of the things you might not know you could claim.
Petrol: although you cannot claim tax deductions on any speeding or parking fines, if you drive your car for work related purposes you can claim that on your tax return as a travel expense.
Clothing: any work-specific clothing items you buy can be deducted. For example, if you need non-slip shoes or uniform items. Keep your receipts as any clothing expenses claimed exceeding $200 would need to be accompanied with proof of purchase.
Laundry: this includes any dry cleaning or visits to a Laundromat. You can even claim the washing expenses incurred from doing it yourself, it will usually be a low rate of $1 per wash but if you can explain and justify it properly this cost will add up. If the cost goes over $150 you will have to provide evidence, so keep a record of all the laundry detergent and fabric softener that you buy.
Home office expenses: you don’t have to running your own business out of your home to claim on home office expenses. You just need to have a dedicated place or office that you use for work. If you spend a few hours each week working from home you can still claim on a number of items such as stationary, an office chair or printer.
Subscriptions to industry publications: if you receive journals or trade magazines and pay an annual or monthly subscription, you can claim this on your return.
Accountant expenses: if you went to see a tax agent last year you can claim their fee off this year’s return.
Education: if you paid for and spent time trying to up skill with study then you can significantly reduce your taxable income by claiming this, as long as the course or conference was relevant to your profession.
Bank fees: you can claim ATM or over-the-counter fees charges incurred when withdrawing your salary from your account. Monthly fees and payments on interest funds will usually be recognized as tax deductible.
The key is to remember that all tax deductions have to have been purchased within the year you are claiming and they must be work-related. Remember that you need to keep these receipts for at least five years, in the event you get audited.
Take a look at the Australian Taxation Office website for a more detailed break down of what you can claim. It is recommended that you keep all your receipts in one place, preferably in an orderly filing system, to make the process easier. It is also a good idea to log into your online banking accounts around the end of June and download your transaction history for the past year. It will give you a good idea of what you have spent and will indicate any interest that you may have earned.