Asking yourself: what can I claim on tax? We hear you!
So, you want to give yourself the best chance of maximising your tax return, but you’re not sure what can I claim on tax? We hear you! That’s why we’ve asked our expert Money Coach Zoe Lamont to share her top tips for supporting you in getting your tax return done on time, including some of the most common tax deductions that you may be eligible for.
Whether you decide to go to an accountant or tax adviser, or complete your return at home, knowing what you may be eligible to claim will help you prepare.
But first, if you’re reading this before the 30th of June, read our article on how to prepare for the end of the financial year. In order to maximise your deductions you’ll want to know what needs to be done before the financial year comes to a close.
1) Organise a tax time date with yourself, go on, we promise it’ll be fun!
The financial year closes on the 30th of June, but tax returns aren’t due until the 31st of October. While that may seem to be a blessing, for many of us it’s a curse, with ample time for procrastination and forgetting that tax time is even a thing.
That’s why we recommend that you mark a time in your diary now to get your return sorted. Plan early, it may take you longer than you expected or you may need to gather additional documentation. Remember, if you think you’re likely to get money back from your tax return, the sooner you lodge, the sooner you’ll see those $s in the bank.
2) If you have private health insurance, track down the most recent annual statement
Health insurance isn’t tax deductible, but you might be eligible to get cash back in the form of a private health insurance rebate. The rebate is the government’s way of rewarding you for paying for private health coverage.
If you earn $140,000 p.a. or less as an individual, or $280,000 p.a. or less as a couple (or family) (for FY 2022-2023), you may be eligible to claim up to 33% back on your health insurance costs.
If eligible, you can claim the rebate either:
- through your private health insurance provider – your private health insurance provider will apply the rebate to reduce your private health insurance premiums; or
- when you lodge your tax return – as a refundable tax offset.
For more information, check out the ATO’s website.
If you earn more than $90,000 per annum as an individual, or $180,000 as a couple (or family) (for FY 2022-2023), and you don’t have private health insurance cover, you will likely be charged the Medicare Levy Surcharge, which is a tax of up to 1.5%. This is in addition to the 2% Medicare Levy that most taxpayers pay. For more information, check out the ATO’s website.
If you are completing your tax return through myTax and the information is not pre-populated for you, or if your accountant or tax advisor can’t see it in their system, get in touch with your health insurer to secure a private health insurance statement.
3) Know the work-related expenses you may be eligible to claim for
Work-related deductions are expenses that you incur as a direct result of doing your job. The Australian Tax Office (ATO) is very specific in its definition of work-related deductions and will check that they are legitimate if you are audited (and no, that coffee that you need every morning to even begin work, is most likely not included!).
If you love to be organised (or even if you don’t), there is a handy ATO myDeductions app for tracking work-related deductions throughout the year.
So what can you claim? In the words of the ATO, any work-related expenses that you plan to claim as tax deductions need to:
- Be purchased with your own money (and not reimbursed by your employer)
- Be directly related to helping you earn an income
- Have records for proof (usually a tax invoice or receipt)
- Your claims for deductions need to be reasonable. If you use your phone for work, by all means, claim it as a work-related expense. But, if you only use it 50% of the time for work, then only claim it at 50%. Simple!
- If you’re working from home, make sure to head to the ATO’s website to find out how to make a claim on your WFH expenses.
So what deductions may you be eligible for?
- Formal education courses related to your field and provided by a professional association
- Work-related seminars
- The purchase of journals, magazines and/or books relevant to your field
- Attendance of work related conferences or education workshops
- Tools and equipment necessary to perform your job with success
- Union fees
- Meals purchased while working overtime
- The purchase of protective products needed for the course of your work, such as sunglasses
- Computers and software used in the course of your employment
- Part of your mobile phone bill if you use it for work
- Home office expenses
- The premiums for income protection insurance
- The use of your car if you need it to go to various different locations for work (not to travel to your main office
The ATO provides specific guidance on many of the deductions listed above so check out the ATO website for more info.
4) Getting tax back on charitable donations doubles the joy of giving!
Donated to a charity registered on the ACNC Charity Register (as these are the only charities that you can claim tax deduction donations from)? Then your donation is likely eligible as a deduction, so make certain to keep your receipts and claim!
5) Add a TFN to your Verve Money account and any other investment accounts.
If you provide Verve with your Tax File Number (TFN) then the tax information relating to your investments should pre-populate in your MyTax account. It also means that you are more likely to be paying the correct amount of tax and that you will be eligible for any available tax benefits, ultimately helping to maximise your investment returns.
How to add a TFN
- Login to the Verve Money App
- Head to Profile > My account details > and fill in your Tax File Number (TFN).
Heads up, providing a TFN in app rather than email is an easy way to keep personal information secure.
How do I find my TFN?
- Log into your myGov account
- Head to Australian Taxation Office > Find my TFN
Don’t have a myGov account?
If you don’t have a myGov account, you can usually find your TFN on your Income Tax Notice of Assessment (NOA) if you have lodged a tax return, or a payment summary or income statement provided by your employer.
Overall, providing your TFN to your investment provider can help to ensure that you are paying the correct amount of tax and that you are eligible for any available tax benefits, ultimately helping to maximise your investment returns.
Note: You are not required to provide Verve Money with your TFN. However, if you do not provide your TFN we may be required to deduct tax from your investment at the top marginal rate, plus levies, on gross payments including distributions of income. You may be able to claim a credit in your tax return for any TFN tax withheld. Collection of TFNs is permitted under taxation and privacy legislation.
6) An additional personal or spouse contribution to your super fund, or your partner’s, may be eligible for a deduction.
You may be eligible for a tax deduction on any personal contributions or spouse contributions that you make to super before the end of the financial year. You can read more about the different types of contributions that you can make to super on the ATO’s website.
7) If a professional helps you prepare your tax return, don’t forget to claim it (hopefully they’ll remind you!)
You can claim the cost of using a tax agent and the cost of travelling to and from your tax agent’s office, so if you have an IRL meeting, don’t forget to save those tram or bus tickets.
Looking for a practical and straightforward guide to help you make informed and proactive decisions when lodging your tax return?
This article is published by Verve Money Pty Ltd (ABN 71 653 669 366, AFS Representative No. 001294184), a Corporate Authorised Representative of True Oak Investments Ltd (ABN 81 002 558 956; AFSL 238184), as the Manager of Verve Money. A friendly reminder that all the financial information contained in this article is general in nature and does not take into account your personal financial objectives, situation or needs. It’s important to do your own research and consider getting in touch with a professional adviser to access specific information tailored to your unique situation.
You should read the Product Disclosure Statement, Investment Guide, Target Market Determination and Financial Services Guide before making a decision to acquire, hold, or continue to hold, an interest in the Verve Money Fund. Visit www.vervemoney.com.au/documents to view these documents.
Interests in the Verve Money Fund (ARSN 662 622 899) are issued by Melbourne Securities Corporation Limited (ACN 160 326 545, AFSL 428289). When considering financial returns, return of capital is not guaranteed and past performance is not indicative of future performance.