Your Tax Time Checklist
Ah, tax time. It might be an annual event, but for a lot of us, June 30 still comes as an unwelcome surprise. From digging through armfuls of receipts to tracking down a good accountant, tax time can feel complex, confusing and overwhelming. But, lodging your tax return doesn’t have to be a hassle. In fact, this tax time checklist is a great place to start. With a bit of planning and preparation, you can get all your paperwork sorted and ensure you’re doing what you can to maximise your returns.
IMPORTANT NOTE: This checklist does not constitute or contain personal taxation advice. We have not considered your personal financial or taxation circumstances in providing the information contained in this checklist. If you have any questions concerning your personal taxation circumstances, we recommend that you contact a licensed professional, such as an accountant or financial adviser.
1. Consider claiming tax-deductible business purchases
Did you know there is a range of work-related expenses that can be claimed as tax deductions? From printer ink to a new laptop, you may be able to account for these in your tax return (and potentially lower your tax bill).
Before we dive into the nitty-gritty of what work-related purchases are tax-deductible, it’s important to note that your expenses have to tick a few boxes first.
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; and
- Have records to prove them (usually a tax invoice or receipt).
Broadly speaking, some of the key purchases that you may be able to claim as tax deductions include:
- Computer gear and stationary (such as printer paper and ink)
- Home office equipment (things like laptops, phones, and printers)
- Work-related education and training courses
When it comes to claiming these items as deductions, there are different rules depending on how much it costs. That means:
- Items under $300 may be claimed for an immediate deduction – 4 conditions must be satisfied
- Items over $300 can only be claimed for a decline in their value (also known as depreciation)
If you’re unsure what category your purchases will fall into, have a chat with your accountant as they’ll be able to offer specific advice tailored to your unique situation.
2. Proactively pay any tax-deductible business expenses
Do you run your own business? If so, it could be a wise move to pre-pay some business expenses to claim as a tax deduction in your upcoming tax return.
Typically, these deductions relate to subscriptions, lease/rent payments and insurance premiums that can be paid in advance for services delivered in the next financial year. If you have the cash to spare, making these payments in advance might help to lower your tax bill.
As you can imagine, there are stacks of specific rules that apply. We’d suggest chatting to your accountant to see if you are eligible for this deduction before making a claim in your tax return.
3. Add your TFN to your Verve Money App
By providing your TFN, you ensure that your investment earnings and capital gains are correctly reported to the tax authorities. This helps you comply with tax regulations and ensures accurate tax assessments. It also makes tax time admin easier and ensures you’re not unnecessarily taxed at the highest rate, which could reduce your overall returns. It only takes a minute so follow these easy steps and add your TFN to the Verve Money App.
How do I add my TFN?
- Login to the Verve Money App
- Head to Profile > My account details > and fill in your Tax File Number (TFN).
Heads up, providing your TFN in-app and not through email is an easy way to keep your 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.
Note: You are not required to provide us 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.
4. Claim a tax deduction for personal super contributions
You may be able to claim a tax deduction for personal super contributions that you made to your super fund during the financial year.
Personal super contributions, also known as non-concessional contributions, are made from your after-tax income (i.e., from your bank account directly to your super fund). They don’t include superannuation contributions paid by your employer directly to your super fund from your before-tax income, such as the compulsory super guarantee or salary sacrifice amounts.
Make a personal super contribution, and you’re eligible to claim a tax deduction when you complete your tax return. Your deduction will reduce your taxable income and consequently reduce the amount of tax you need to pay.
If you’re planning to claim personal contributions in your tax return, make sure to check your eligibility, make a personal contribution to your super fund, and then notify your super fund that you intend to claim a tax deduction for the contribution by providing them with a completed Notice of Intent to Claim form. Make sure to make the personal contribution and get the form to your super fund before June 30 to ensure you can make a claim for these personal contributions in your FY 2022/23 tax return. When you complete your tax return, you can claim a deduction for the amount of the contribution stated on your Notice of Intent. Also, if you claim a deduction for a personal contribution, and your adjusted tax income is less than $37,000 p.a. you may also be eligible for a low income superannuation tax offset on the 15% tax paid on the contribution. Eligibility for this offset is decided by the ATO when you lodge your tax return. If you’re eligible, you’ll receive an offset payment directly into your super fund account.
5. Give back to a registered charity
Supporting organisations working for good can actually help you out at tax time, since donations to certain charities can be claimed as deductions in your individual tax return.
If you’re looking to claim your donations as tax deductions, make sure to check that the organisation you’re supporting is endorsed as a Deductible Gift Recipient (DGR).
You’ll also need to check that the donation you’re making is what’s called a “genuine gift”, which means that you can’t receive a benefit from your donation (this rules out claiming a tax deduction for good deeds like buying raffle tickets or food items from charity stalls). Want to check which charities have a DGR endorsement? Head to the ACNC Charity Register and search by the organisation’s name or ABN to see if your donation will be tax-deductible.
6. Gather all your documents and expense claims ahead of time
Here’s the thing: June 30 will be here before we know it. So, now is the time to start gathering your paperwork and getting your files sorted to give yourself the best chance of a smooth, stress-free tax return.
Here are some of the key documents to have ready:
Income Documents: these are all the forms related to any income you’ve earned this financial year, including:
- Payment Summaries and Income Statements: chat with your employer to find out which documents you’ll receive (typically, you’ll access this after July 31st via your myGov portal).
- Lump-Sum and Termination Payment Summaries: if you’ve left or changed jobs this financial year.
- Government payment summaries (if you received financial support from the Government during the year).
- Interest income from banks and building societies
- Dividend statements for dividends received or reinvested
- Annual Tax Statements from Managed Funds
- Annual Statement from Super Funds
Other Income Documents: this is information related to any other sources of income outside of your main job, including:
- Rental Properties
- Business Income
- Foreign Income
- Capital Gains
- Employee Share Schemes
Deductions: this covers all work-related expenses that you’re looking to claim as deductions, including:
- Motor vehicle expenses
- Travel (such as fares and accommodation)
- Uniforms or work-wear
- Self-education or professional development training
- Union, registrations, tools, subscriptions or memberships
- Home office gear as well as seminar or conference costs
- Phone, computer or interest expenses
- Donations to registered charities or building funds
- Income protection insurance premiums
Offsets and Refunds: this covers everything from
- Health insurance and rebate entitlement statements
- IAS statements or details of PAYG instalments paid (if you run your own business)
Spouse Details: including your spouse’s taxable and exempt income
Tax Refunds: make sure to have your bank account details (including BSB and account number) ready when lodging your tax return so you can claim any refunds you’re entitled to.
7. Get clear on tax time deadlines
If there’s one date you remember, make it this: October 31st. This is your tax return due date, which means you need to have lodged your tax return for FY 2022/23 by this date (if you’re DIYing your tax return).
However, if you’re planning to use an accountant, this deadline can be extended all the way until May 15th, 2024.
If you miss this deadline, you may be hit with a late lodgement penalty which will be calculated by the ATO with reference to your PAYG status/assessable income and the period of time since the due date for lodgment.
So, there you have it. After completing this tax time checklist, you’ll be ready to lodge your tax return with confidence this year. And stay tuned, we’re putting the finishing touches on our Ultimate Guide to Tax Time, which expert tips and tricks about how to maximise your tax return and how to set yourself up for success this new financial year.
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.