What you need to prepare your tax return

Whether or not you're going to prepare your tax return yourself or use the services of a Professional Tax Agent. There's some information you'll need to get started.

Firstly, you'll need to have ready (especially if you're using a new Tax Agent):

1. Your Tax File Number (TFN)

2. A previous tax return. (This is important if your claiming deductions that need to be rolled over from the previous year such as depreciation).

For this years return Make sure you have also got (if relevant):

Any payment Summaries
Dividend Statements
Health Insurance Statements
Receipts for any deductions you intend to claim

Some Common Deductions For Individuals

We are often asked what are the common deductions that help reduce the tax you’ve paid over the years. If you’re a salary and wage earner, you’re usually quite limited in what you can deduct, however, there are a few common deductions you may be able to make:

1. Donations to charities:

If you’ve donated money to a registered charity, you’ll get a receipt for any amount over $2, which you can deduct.

2. Uniforms & Protective clothing:

If you have to wear a uniform or protective clothing, you can either claim a laundry allowance or claim your laundry receipts.

Be Careful! This doesn’t mean you can claim dry-cleaning for the suits you choose to wear, this deduction ONLY applies to Uniforms.

A uniform is defined as clothing designated by your employer that also carries the logo of your work place. Generally, laundry of uniforms such as protective clothing if you work in a trade or in the mines, or chef’s clothing is claimable; either as an allowance if you do the laundry yourself, or a deduction if the laundry is done by a third party.

4. Telephone Expenses:

If you use your mobile phone for work purposes. For example: Calling clients using your own phone, you can claim a deduction for the percentage of work related calls.

You will need at a minimum one monthly phone bill and highlight the usage that applies to the business usage. From this bill you can calculate the percentage used for business (total minutes for business divided by total minutes for the phone bill). This can then be applied as an average for the remainder of the 12 months for the financial year in question (if you’ve had the same job for the full financial year)

Note: It’s imperative to keep a copy of your records.

5. Work-related assets you’ve purchased:

If for example you are a traide you may claim a deduction for the tools you use for work. If you work in an office you may also be entitled to claim some of your computer related purchases. Be Careful: You need to figure out the percentage that applies between business and personal use. You can ONLY claim the usage % related to business!

6. Study Expenses

If you are studying you may also be entitled to some deductions. Depending on the study related expense there are different rules that apply that determine how much you can claim. However, the studying that you are doing must be specific to the job you are currently employed in to enhance your skills. This means you cannot claim a deduction if your study does not relate to the work you currently do or you are not yet currently employed in the field that you are studying.

7. Home office expenses:

If you own your home, it may not be advantageous for you to claim any home office expenses. This is because any portion you are claiming for your home office (e.g. 10%) will be taxable if you sell your home. If you are renting a property, however, it could be more advantageous for you to claim Home Office Expenses so it is worth your while discussing this with your tax advisor. Home office expenses generally need a dedicated room that is used solely for office use. You might be able to can claim a portion of internet, electricity and rent.

Handy Hint - Keep copies of receipts!

Remember that every time you claim more than $300 of deductions in your personal tax return you must keep the receipts for five years.

Tip: Scan a copy of the receipts you’ve used to claim your deductions so you have an electronic copy just in case something happens to the physical receipt.

* Remember that the above is general advice and for specific advice relevant to your personal circumstances, we strongly recommend you seek help from a Tax Professional.