Working from home? How to boost your next tax return
With the range of technology and software available today, it’s become easier than ever to work from home. Employees can efficiently complete calls using teleconferencing software, many collaboration tools are now cloud-based, and work devices, including laptops and tablets, are light and portable.
If you’ve been working from home, you’ve likely also set up a dedicated work area, and you’re using your own electricity and resources to power your workday. But which of these items can you claim in your next tax return to ensure you maximise your return?
3 things you should know coming into Tax time
As tax time approaches, all the information out there can seem a little overwhelming! We’ve put together our top 3 things you should know about as the end of the financial year approaches, to help you get the most out of your tax deductions.
Work from home expenses under scrutiny
If you worked from home during lockdown and spent money on work related items that were not reimbursed by your business, you might be able to claim some of these expenses as a deduction – but not everything you purchase can be claimed.
The ATO has stated that it is looking very closely at work related deductions that are being claimed. If you are claiming your expenses, there are three methods you can use:
Get Every Possible Deduction This Tax Year
As tax time approaches, make sure you’re ready to claim all the deductions you’re entitled to. These include the following:
Travel. If you use your own car for work related duties, you may be able to claim a deduction for related expenses. There are two ways to calculate these deductions; using a logbook or the cents per kilometre method. Either way, make sure you are tracking all of your travel throughout the year to make it simpler at tax time. In most circumstances, you can’t claim the trip to and from work.
Clothing, laundry and dry cleaning. You can claim on the cost of purchasing and cleaning uniforms and other work related clothing. It needs to be clothing specific to your work (such as safety clothing or a shirt with a logo on it) and not just general black pants or a white shirt that matches a work dress code.
Putting funds away for BAS, Tax and Super
As a sole trader or small business, if possible, it is best to put money aside throughout the year to help pay for your tax. Make sure you regularly set money aside, or are aware of future tax payments, so you are able to meet your tax responsibilities. A set routine for putting aside tax as you go is essential to avoid any tax-time panic.
Recording your deductions
When lodging your tax return its important to have a record of all your work-related expenses and their associated receipts. Keeping good records is essential to allow you to complete your income tax return and to back up all your claims.
No More Letting Go of The Past
In superannuation, letting go of the past can be a bad thing. The Government has rightly moved to stop it, with another fantastic super change coming into effect from the 1st July 2019.
