The end of the financial year often creeps up before we even know it. Whether you’re thoroughly prepared, or still scrounging together receipts and payslips, tax time can be confusing due to changes in policies and procedures every year. Promptness and attention to detail really pays off when it comes to tax – not only will you avoid a late fee (which applies to some individuals after the 31 October deadline), you’ll also ensure you don’t pay more than you need to. Luckily, there are several options available to help guide you through the process so you can get your refund sooner and start the next year with your finances in top shape.
See an accountant
It’s estimated that more than 80% of Australians seek the assistance of an accountant when putting together their return. Even if your affairs are fairly straightforward, the plus of having a professional look over your finances is that they may pick up on tax benefits that you weren’t aware you were eligible for. Tax preparation service costs are themselves tax deductible as well. Don’t feel that you need to go this route, though, because preparing a return yourself can be quicker and easier than you think, and you may prefer the sense of confidence and control that comes with an independent approach.
Lodge your return online
The Australian Tax Office’s “E-Tax” program is one tool that can makes the process simpler by allowing you to complete your return online. The strongest advantage of this is that your return will most likely be processed within two weeks. It’s also quicker to complete because a lot of the data is pre-filled by the ATO according to your responses. You should keep a paper copy of your documents in case they are requested, and if you are claiming work-related deductions you will need to post the documentation separately. Apart from that, everything including your signature can be added digitally.
Offsets and deductibles
Many people focus on deductibles – expenses which reduce your taxable income - when gathering together all the paperwork they need for their return. However, it’s worthwhile to also look at the three main types of offsets as these directly reduce the amount of tax you are required to pay. The private health insurance rebate allows you to claim back 30-40% of your premium. Another important rebate is the education tax refund which helps families and students with primary and secondary education costs. Finally, there’s the franking tax offset. If you hold shares in a company which has a strong return on equity, you’ll want to be sure to check if you’re eligible for refunds of any allocated taxes.