Your complete guide to beating the tax man: Expert reveals the tricks to pocketing cash – and avoid being audited
- A tax expert has revealed his top tips for Australians submitting their tax returns
- Claim $300 in work expenses without receipts; visit shops to ask for new ones
- Mark Chapman from H&R Block revealed a major change many will benefit from
- He also said new rules for small businesses will be a welcome addition for many
With tax time fast approaching experts have revealed the ways Australians can get the most out of their refund – and avoid being audited.
H&R Block tax communications director Mark Chapman has provided Daily Mail Australia with a number of his top tips to come out ahead in this year’s tax return.
Mr Chapman has also revealed a major change to the tax system that people can benefit from this financial year.
With tax time fast approaching a tax expert has revealed the ways Australians can get the most out of their refund and avoid being audited
The $1080 payment you can get for NOTHING
Among the biggest changes for workers to be aware of this financial year is the new low to middle income tax offset of up to $1080.
That’s a significant jump on the $530 refund which already applies. Prime Minister Scott Morrison’s government announced the measure in the 2019 budget.
The policy still has to pass Parliament, but Mr Chapman said the Australian Tax Office (ATO) will revisit returns that have been submitted once the law comes into effect.
‘So, for example, if it passes as law in October the ATO will go back and automatically apply the new offset to your tax return and give you a refund.’
Among the biggest changes for individuals this year is the new low to middle income tax offset of up to $1080 which the government announced in May’s budget
Australian residents whose income does not exceed $125,333 are entitled to the new tax offset.
‘The offset is only available after assessment though, so you have to lodge your tax return first,’ Mr Chapman said.
Top tips for workers this tax return
TOP TAX TIME TIPS
1. Comb through your bank statements to identify items you could claim such as those you use for work
2. If you’ve lost receipts, go back to the store and asking for a replacement. You can claim up to $300 without receipts
3. Check you have declared all of your income. Employers and third parties provide most information to the tax office, however, the pre-fill info may not be up to date
4. Small businesses can now claim items up to $30,000 that they use for their work under the instant asset write-off scheme
For example, tradespeople can claim tools or sometimes cars
5. Submit your return on time to avoid fines of over $200 for every 28 days overdue.
One of Mr Chapman’s important tips is for workers to comb back through their bank statements over the last financial year, and try to identify items which you may be able to claim, such as those you use for work.
‘Take the time to go back over the year and identify all the purchased items you want to claim and make sure you have receipts, invoices, and supporting documents.’
‘If you have lost any receipts it may be worthwhile going back to the store where you purchased the item and seeing if they can give you another one.’
‘Claiming up to $300 on items is fine this year without receipts, however, the ATO is looking at rule as they believe some people are automatically claiming this.’
‘For items under $10 you don’t need receipts and something like a diary entry logging the expense is fine. ‘
His biggest tip for avoiding an audit is to make sure you declare all your income.
‘A lot of income is reported by third parties to the ATO, however, the pre-fill info may not be updated so you need to check it is correct, especially if you lodge early.’
He also said submitting your return on time is vital to avoid paying extra and having the tax office looking more closely at your return.
‘You have until the 31st of October to submit your tax return and there is a $210 penalty for every 28 days overdue.’
Small business are also winners this financial year with a number of initiatives setup to assist their bottom line – including being able to claim $30,000 in business assets.
Small business are also winners this financial year with a number of initiatives setup to assist their bottom line – including being able to claim $30,000 in business assets
The ATO has brought in the instant asset write off until June 30 2020 which allows businesses with an annual turnover of less than $10 million to claim back any business assets they purchase up to a value of $30,000 for each item.
For example, if you own a cafe and purchase new table and chairs for $12,000 then the entire cost can be claimed on your tax return – and there is no limit to the amount of items that can be claimed.
The concessions for small businesses don’t stop there with those turning over less than $5 million being able to claim a tax offset of $1,000.
For keen entrepreneurs starting up a new small business you can deduct professional expenses linked to set up costs such as accounting and legal fees.
THE SURPRISING EVERYDAY ITEMS YOU CAN CLAIM ON TAX
Daily Mail Australia has rounded up the surprising items you can use to minimise your tax bill – and they’re all approved by the Australian Taxation Office.
But a word of warning: you need to be able to justify each item. For instance, you can only claim sunscreen if you work outside as part of your job, or a hair straightener is you work as a hairdresser.
- Sunglasses and sunscreen
- Women’s handbags
- Hair straighteners
- Home electricity
- Phone and internet bills
- Adult toys and costumes
- Accommodation, flights and meals
- Pool tables, ping pong tables, gaming consoles and TV
- Makeup with SPF
Source: The surprising everyday items you NEVER knew you could claim on tax