Theres one certainty in life that comes around every year at the same time - your tax return!
Allow yourself some time to organise all the correct information you will need to complete your tax return. And you have until October 31st to lodge your tax without penalty.
Below are some helpful Tax tips taken from the Australian Securities & Investment Commission (ASIC) MoneySmart financial guide, to help make this year's tax return and the coming financial year, a little easier.
Records you'll need to complete your tax return
- Payment summaries - these outline the income you have received from your employer, super fund or government payment like Centrelink and the Department of Veterans Affairs.
- Bank statements - these detail any interest you have earned during the period and fees you have paid. Your bank may have summarised these for you, either online or at the bottom of your bank statement.
- Shares, unit trusts or managed funds statements - these contain information on dividends or distributions you've received. Dividends that you've elected to reinvest must be declared as income.
- Buy and sell investment statements - these are needed to calculate capital gains and losses. If you bought or sold any shares you can access the details on your online broking account or you can get them from your investment adviser or stockbroker.
- Records from your rental property - if you use a property manager, you will probably get an annual tax statement that details income and expenses. Otherwise you will need to gather details of income received and expenses paid, including any capital gains or capital losses if you have sold the property.
- Foreign income - any details of foreign pensions or other foreign income.
- Private health insurance policy statement - this information is needed to complete the private health insurance section of your tax return.
Income you must declare
- Employment income.
- Super pensions, annuities and government payments.
- Investment income (including interest, dividends, rent and capital gains).
- Business, partnership and trust income.
- Foreign income.
- Income from crowdfunding (for example, donations received for a venture in which you intend to make a profit).
- Income from the sharing economy (for example Uber or Air BnB).
- Other income - including compensation and insurance payments, discounted shares under employee share schemes, some prizes and awards.
Visit the ATO's website for more information on income you must declare.
Tax deductions you can claim
To claim a deduction for work-related expenses:
- you must have spent the money yourself and not been reimbursed.
- it must be directly related to earning your income.
- you must have a record to prove you paid for it.
When your expenses meet these criteria, here's a list of the things you may be able to claim:
- Vehicle and travel expenses - This does not normally include the cost of travel between work and home but, if you use your car for work or work in different locations, then you may be able to claim a deduction.
- Clothing, laundry and dry-cleaning expenses - To legitimately claim the cost of a uniform, it needs be unique and distinctive, for example it contains your employer's logo, or is specific to your occupation, like chef's pants or coloured safety vests.
- Gifts and donations - to organisations that are endorsed by the ATO as deductible gift recipients.
- Home office expenses - Costs could include your computer, phone or other electronic device and running costs such as an internet service. You can only claim the proportion of expenses that relate to work, not private use.
- Interest, dividend and other investment income deductions - Examples include interest, account fees, investing magazines and subscriptions, internet access, depreciation on your computer.
- Self-education expenses - If the study relates to your current job, you can claim expenses like course fees, student union fees, textbooks, stationery, internet, home office expenses, professional journals and some travel.
- Tools, equipment and other equipment - If you buy tools or equipment to help earn your income, you can claim a deduction for some or all of the cost. Examples include protective gear, including sunscreen, sunglasses and hats if you work outside, office equipment, safety equipment and technical instruments.
- Other deductions - Other items you can claim include: union fees, the cost of managing your tax affairs, income protection insurance (if it's not through super), overtime meals, personal super contributions and other expenses incurred in the course of earning an income.
What tax deductions are not allowed
Here's a list of deductions you usually can't claim on your tax return:
- Travel between home and work - which is generally considered private travel.
- Car expenses - unless you are transporting bulky tools or equipment that your employer requires you to use, and you cannot leave it at work.
- Car expenses - that have been salary sacrificed.
- Meal expenses - unless you were required to work away from home overnight.
- Private travel - including any personal travel portion of work-related travel.
- Everyday clothes - you bought to wear to work (for example, a suit or black pants), even if your employer requires you to wear them.
- The cost of laundering eligible work clothes - unless you can show how you calculated the cost.
- Higher Education Loan Program - contributions charged through the HELP scheme.
- Self-education expenses - where there is no direct connection to your current employment.
- Phone or internet expenses - that relate to private use.
- Tools and equipment that cost more than $300 - however, you can depreciate the cost over a number of years.
Test your understanding of income you must declare and what you can and can't claim with the ATO's tax time quiz. If you're still not sure what you can or can't claim visit the ATO or a registered tax agent.
Lodging your tax return in 2019
You can lodge your tax return online using myTax - it's quick, easy, safe and secure. If you haven't already set up a MyGov account, you'll need to create one and then link to the ATO. Visit the ATO website to find out how to lodge online.
- If you have a spouse you will also need details of their income and expenses to make sure your entitlements are correctly calculated.
- Once you have lodged your tax return keep an eye on your myGov inbox for your notice of assessment and tax receipt.
Lodge your return before the deadline.
If you're lodging your own tax return, you have until 31 October 2019 to lodge it. If you decide to use a registered tax agent, or are using a different agent from last year, you will need to contact them before 31 October.
Disclaimer: CCAdvice is an official Cancer Council NSW account, featuring regular content from the financial assistance team.
