Five things you need to do today
THE end of the financial year is nearly here.
That means you have just days left to get your affairs in order and take advantage of any last-minute deductions to get the most out of your tax return.
If you haven't already, here are the five things you need to do right now, according to Liz Russell, senior tax agent with Etax.com.au.
GATHER YOUR INFORMATION
"Have all your information in one place," she said. "The money you might have spent throughout the year, tax-related expenses. When you go to see your accountant you don't want to be told you can't claim something because you don't have the documentation, so collect all your receipts."
The Australian Taxation Office recently confirmed that physical copies of receipts were no longer required and that a photo of a physical receipt was an "adequate record provided it is a true and clear reproduction of the original".
If you don't have either a physical or digital record of the receipt itself, the ATO would in some cases accept a credit card or bank statement documenting the purchase, according to Ms Russell.
"If for some reason you've gone and bought a mobile phone from Harvey Norman and lost the receipt but you've got a credit card statement, and you still have the box for the phone, the ATO will at a pinch accept that as long as you've made a diary entry or written on the box when you purchased the item," she said.
Taxpayers should also check up on things like bank interest and share dividend statements. "Chase that up now to see if it's come in," she said. "It's about having your info, knowing what you've got, what you've earnt and what you've spent."
BOOK YOUR ACCOUNTANT
"Book it now, get in early with the tax agent," she said. "Tax agents are here to help people get their biggest eligible refund. If you try to do it yourself or on the ATO website, there's no guidance. All of a sudden you might find your refund is held up."
That could be because the taxpayer has made an innocent mistake.
"A couple of weeks later you might get a warning letter to say they disagree [with some aspect of the tax return]. The process to explain why you've done it wrong can take another 28 days," she said.
And if you do use an accountant, make sure you follow step one.
"You can reduce your own tax agent costs by not having to be questioned or chased up by the agent to find something," she said. "A fee can be time-based. Keep the time down by having your information ready right at the outset. That won't delay your refund."
BEWARE OF 'INSTANT REFUNDS'
"Steer clear of 'instant refund' services," she said. "A lot of those actually have high costs attached to getting your refund. They're like a loan - they charge you a fee and they might keep quite a lot out of your refund. You don't necessarily know that because it's in the fine print."
Mr Russell said "99 times out of 100" instant refund services were lending the customer money "on the proviso" they get a cut of the tax refund. If for some reason "that refund doesn't come through because the ATO doesn't agree", customers could actually wind up out of pocket, she said.
MAKE LAST-MINUTE PURCHASES
"If there's anything you're going to spend money on, do it now," she said. That can include charitable donations or work-related items.
"Charitable donations have to be received before June 30, it actually has to come out of your bank account to be deductible this year."
If there are some small items you need for work, such as a piece of equipment or tool and "you were going to spend the money anyway", spend it now before June 30. "A lot of these deductions are not large but if you add them up it can make a difference to your refund," she said.
"Union fees, professional memberships, subscriptions to work-related magazines, work-related car expenses if you're using it for work travel, home office expenses if you're required to work from home," she said.
"Briefcases, work satchels, women's handbags [for] carrying work-related paraphernalia. Work clothing is a little bit hard because it has to be a registered uniform. A little tip - don't claim it unless it's a registered uniform as the ATO is looking at it closely this year."
TOP UP YOUR SUPERANNUATION
"People need to be aware that from July 1, 2017, you are now entitled to claim super contributions as a tax deduction," she said. The change was introduced in last year's Federal Budget.
"You never used to be able to claim superannuation as a tax deduction unless you were self-employed mainly, whereas now you can. The max anybody can put into super in one year, between your employer and you, is $25,000.
"So for example, if your employer is only putting in $12,000 and you have excess cash and were thinking of putting money into super, you can get a tax deduction as long as the total amount doesn't exceed the limit.
"Say you're on a $100,000 salary, your employer has to put in $9500 [under the 9.5 per cent super guarantee]. That means you could conceivably put $15,500 into your super and get a tax deduction."
To be eligible, the money must be in your super fund by June 30, and you must notify your fund in writing that you intend to claim a tax deduction by filling out a form available from the ATO website.
"Tick the box, they will send you back confirmation of that advice," she said. "You must have those two pieces of correspondence - a copy of the letter and the confirmation notice."