Tax tips: How to get more tax return

Tip 1: Claim as many work-related expenses as you can

Many things you buy in order to do your job can be claimed as a tax deduction. Some are more obvious than others, like an apprentice's tools or travel expenses. Others are not as obvious: for instance, did you know that journalists may be eligible to claim their streaming and subscription costs? So long as these are incurred in the course of performing their work (for example, a sports journalist that needs to have access to the sport channels), they can be claimed as deductions.

Here are a few examples that you might be eligible for to get more tax return:

• Tools and work-specific clothing. The item is needed to perform your job e.g. tools that tradesmen use, equipment that hairdressers use, special shoes such as steel cap boots.
• Safety items. Item's needed for self-protection or safety when doing your job e.g. sunscreen and sunglasses if you are required to work outside
• Laptops and mobile phones. If these are used for work purposes you're able to claim it on tax (if you have a laptop that you use for work and personal use, you're only entitled to claim the portion that you use for work).
• Courses and conferences. Self-education expenses, such as courses and certificates, need to be directly related to your profession and will help you get a promotion or a pay rise.
• Food while away for work. If you're away for work and need to buy dinner or another meal, you can claim this as a deduction. But it's always going to be better financially to try get the full cost reimbursed by your employer instead.

Tip 2. Claim tax deductions for working at home (even if you don't do it that often)

If you work from home full-time, part-time or only on the odd occasion, you're eligible to claim this as a tax deduction. Even if it's just one day a month! There are 2 methods available to calculate your claim: fixed rate or actual cost.

Fixed rate method: you can claim 67 cents per work hour for running expenses. Importantly, you no longer need a seperate, dedicated home office to claim this, like you used to in the past. Say you work from home 1 day a week and balance your laptop on your knees in the sofa; you're allowed to claim for that time. Your claim would look like this:

• 8 hours per day
• Multiply x 48 weeks (assuming you take 4 weeks of annual leave) = 384 hours
• 384 hours x 67c = $257.28 to claim.
• You can claim separate amount for expenses not covered by the fixed rate, such as the decline in value of depreciating assets (like your laptop).

Actual cost method: where you claim the actual expenses you incur as a result of working from home – including part of the rent or mortgage, electricity and insurance. You need to keep detailed records of your expenses to claim this way.

Working from home tax deductions can include the following:

• Cleaning costs. The expenses incurred from cleaning office space at home.
• Office furniture. Purchase and repair costs for office furniture and fittings required to do your job.
• Your phone bill. Landline and mobile phone calls related to work matters (you should get an itemised phone bill and highlight the work-related calls)
• Your home internet bill. You can claim a portion of your monthly internet bill, in line with how often you use it for work purposes.
• Electricity bills. You can also claim a portion of your home electricity bills, in line with how often you work from home.

Finder survey: How many Australians plan to claim their car insurance on tax?

3. Use a tax agent – they'll help maximise your return (and their fee is tax deductible!)

Yes, tax agents charge a fee to help lodge your return. However, for a lot of people, using a tax agent is the easiest way to ensure you're claiming everything that you're eligible for and boost your return. You might even find that they'll help you get a bigger return even though you need to pay a fee (the fee can be quite small, often around $100 for basic returns). Here's how tax agents can help you this tax time:

• Claim the tax agent fee as a tax deduction. The cost of using a tax agent is completely tax deductible.
• Claim more deductions. Tax agents know the ins and outs of the tax system so they'll be able to help you claim everything you're entitled to, even things you might not be aware that you're entitled to claim.
• Claim correctly. If you don't claim your deductions correctly, you could be hit with a fine from the ATO.
• Help with calculations. Claiming things like home office expenses, investment returns and capital gains can be complicated. Tax agents are professionals at this, which can save you a lot of time and stress.

Expert insight

1. "Be proactive: Speak to your tax agent before you make decisions, understanding the tax implications and risks ahead of time can allow you to plan accordingly or choose a different course of action.
2. Keep good records: Keep records throughout the year. Records are required to substantiate claims and could include invoices & receipts, investment cost base information, logbooks and travel diaries.
3. Lean on the professionals: Speak with your tax agent to understand your individual tax circumstances. Tax can often be stressful, and gaining an understanding of your personal tax circumstances can often help alleviate this stress. Engaging a professional firm to assist ensures the tax process is smooth, risk-free and timely."

Sean Urquhart

Partner, Taxation Consulting, Nexia Australia

4. Consider your car and travel expenses

Car and travel costs seem to be an expense most people are comfortable claiming on their tax return. But taking a guess at the amount you spent (rather than calculating it correctly) can land you in hot water. So can making an illegitimate claim, like travel to and from work. Here's how it works:

If you use your vehicle for work, claimable vehicle and travel expenses include:

• Depreciation of your vehicle
• Registration costs of your vehicle
• Insurance costs of your vehicle
• Costs of running your car such as fuel, oil and servicing

Vehicle and travel expenses that are not claimable include:

• The initial purchase cost of your car
• Parking tickets and other speeding fines

You may be able to claim vehicle and/or travel expenses in the following situations:

• The cost of travelling between two separate work places
• The cost of travelling from your workplace to other locations, e.g. client meetings, project work sites
• If you're required to carry big work-related items such as tools or a ladder and these can't be left at work

You're not eligible to claim travel or vehicle expenses for:

• Travel directly to and from work, as this is generally seen as private travel
• If you don't live near public transport and need to drive to work

5. Don't forget charity donations

This is one of the most common things people either forget to claim, or they incorrectly claim as a tax deduction. If you’ve only dropped some spare change in a bucket at a convenience store counter you’re probably not eligible to claim this as a tax deduction. But if you're one of the many Australians who make regular contributions to a charity every month, you can claim something back for your generosity at tax time. The rules are:

• The organisation must have DGR (Deductible Gift Recipient) status
• It is a gift and not something you receive material benefit or advantage for
• You have proof of these payments in the form of a receipt or bank statements
• The donation is the form of money or a financial asset (i.e. you can't gift items like clothes and claim the cost as a deduction)
• The gift must be $2 or more

There are some contributions that the Australian Tax Office (ATO) does not classify as a gift or donation, because you receive a tangible benefit:

• Raffle or art union tickets
• Items such as chocolates and pens
• Cost of attending fundraisers
• Membership fees
• Payments to school building funds as an alternative to an increase in school fees
• Payments that may provide a material benefit for the donor

Bonus tip: Here's how to claim work clothing correctly

Work clothing is something that many people claim incorrectly. It must be specific work clothing that is required for your job and compulsory to wear. Despite what many people think, not everyone is entitled to claim laundry expenses as a tax deduction. Make sure your clothing meets one or more of the following criteria before claiming it as a tax expense:

• It must have a logo or be registered with AusIndustry
• There must be a strictly enforced policy making that item compulsory to wear. For example, simply having to wear black is not specific enough to claim as a deduction
• It must be worn solely for work purposes and not worn outside of work or for personal use
• The clothing is required for your protection at work (e.g. safety glasses)
• The clothing is occupation specific (e.g. black and white checked pants for chefs)

Written by

Alison Banney

Editorial Manager, Money

Alison is an editor at Finder and a personal finance journalist with over 10 years of experience, having contributed to major financial institutions and publications such as Westpac, Money Magazine, and Yahoo Finance. She is frequently quoted in media outlets like SmartCompany and SBS, offering expert insights on superannuation and money management. Alison holds a Bachelor of Communications in Public Relations and Journalism from the University of Newcastle, and has earned three ASIC RG146 certifications in superannuation, securities and managed investments and general financial advice, ensuring her expertise is fully aligned with ASIC standards. See full bio

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