In 2022 Tax Tips

How To Prepare, Lodge And Maximise Your Tax Return

It’s that time of year again – tax return season! If you’re like most people, you’ll be scrambling to get your paperwork in order and hoping for a refund. But did you know that there are ways to make the process easier and get more back from the government? We’ll walk you through preparing, lodge, and maximising your tax return in this post. Follow these tips, and you’ll be smiling at the bank!

No one likes doing their taxes, but they’re a necessary evil. So this year, make the process a little easier on yourself by following these tips to prepare, lodge and maximise your tax return. With a bit of organisation and some strategic planning, you’ll be able to get your taxes done quickly and easily – and maybe even get a refund! So read on for all the info you need.

There are only a few months left before the Australian Tax Office (ATO) deadline for tax returns, and many people are still unsure of what they need to do to lodge their returns. This blog post will provide an overview of the steps you need to take to prepare and submit your tax return – so that you can make sure you get the most out of your refund!

When it comes to tax time, there’s a lot of information to process. Luckily, by following these simple steps, you can make the process as easy as possible. We’ll outline how to prepare your return, lodge it online, and maximise your refund in this post. So whether you’re a first-time tax filer or an experienced pro, read on for some helpful tips!

Preparing your tax return can be a daunting task, but with the help of this guide, you’ll be able to lodge your return quickly and easily. In addition, we’ll provide you with all the information you need to know about preparing your return, including what deductions and credits you may be eligible for. So make sure to read on to find out more!

Did you know that the average Australian adult pays around $1,700 in tax every year? If that sounds like a lot of money to you, then you’re not alone. However, there are ways to reduce how much tax you pay – and we’re going to show you how. In this blog post, we’ll take you through the process of preparing, lodging and maximising your tax return.

Are you ready to submit your tax return? Whether you’re a first-time filer or an experienced pro, there are a few key things to keep in mind to make the process as smooth and stress-free as possible. So whether you’re still gathering your paperwork or have already started filling out your forms, read on for our top tips on how to prepare, lodge and maximise your tax return!

Are you one of the many people who dread tax time? Do you find yourself scrambling to gather all your paperwork and trying to figure out how to lodge your return? Relax – it doesn’t have to be that way. With some organisation and some advice from this blog post, you can prepare for tax time and make the process as smooth as possible. So read on for tips on how to get organised, lodge your return online, and maximise your refund.

No one likes doing their taxes, but they’re a necessary evil. So this year, make the process a little less painful by following these tips to prepare, lodge and maximise your tax return. 

With a bit of organisation and some smart strategies, you’ll be able to get the most out of your return and minimise any headaches come tax time. So whether you’re a first-time filer or an experienced pro, read on for our top tips!

Let’s get started!

How to Lodge a Tax Return?

For many people, lodging a personal tax return can be stressful. Whether you cringe at possibly paying additional taxes to the Australian Taxation Office (ATO) or you find the process of collating the necessary information overwhelming, a lot of people put off the process. But like most things in life, simply deferring the task doesn’t make it disappear.

If you’re an Australian resident and earn a salary or an income, you’ll need to lodge a tax return even if your employer withholds taxes from your pay.

And while you must declare all your income when you lodge a tax return, you may also be entitled to get some money back. According to MoneySmart, the average tax refund last year was $2,574. The amount you get back depends on many factors, such as how much you earned and your deductible expenses.

There are three different ways to lodge a tax return: online DIY tax return, in the office with a tax agent or online with the help of a tax agent.

1. What is a tax return?

A tax return covers any income and expenses through the financial year, starting on July 1 and ending June 30 the following year. Therefore, you have a limited window to lodge your individual tax return at the end of the financial year. Generally speaking, if you’re lodging your tax return, the deadline is October 31.

If you earn an income, you’ll usually have to pay tax on that income. This is because, as a salaried employee, your employer will deduct tax from each pay and transfer it to the ATO on your behalf. This is known as Pay As You Go (PAYG) withholding. However, if you’re a self-employed contractor and use an Australian Business Number (ABN), you’ll need to pay your tax and super.

When you complete your tax return, the ATO will assess your income, expenses and deductions to determine if you’ll get a tax refund or have to pay additional taxes.

2. Who needs to prepare and lodge a tax return?

There will be some people who won’t need to lodge a tax return. This usually includes those with lower levels of income and some older Australians.

Those who will have to lodge a tax return will typically have received income above certain thresholds or certain types of income.

If you’re unsure if you have to lodge a tax return, the ATO’s online questionnaire can help you figure it out.

3. What information do I need to lodge a tax return?

hands working with office items 1

The more organised you are, the easier it to lodge your taxes. In addition to income and bank statements, here’s the additional information you’ll need to gather:

  • PAYG payment summary, which your employer usually supplies
  • Your Tax File Number (TFN), which can be found on your previous notice of assessment or your payment summary
  • Your bank account details; The ATO no longer send refund cheques, so any refund will need to be deposited directly into your account
  • Details of any additional income such as rental income or investments  
  • Bank account interest accumulated
  • Details of any other tax offset information, like your partner’s income details
  • Medicare and private health care statements
  • Details of any occupation-specific deductions you wish to claim
  • Details of any Centrelink payments received

If you plan to claim more than $300 in work-related expenses, you’re also going to need:

  • Copies of invoices or receipts, which can be paper or electronic
  • Credit card statements
  • Travel logbook
  • Home office logbook

Our tax return checklist has all the information and documents you may need to determine which information applies to your tax return.

4. What tax deductions could you claim when you lodge your tax return?

Most tax deductions will be work-related. However, a work-related expense will only be deductible if your employer doesn’t reimburse you. This is because it directly relates to earning an income, and you have a record, such as a receipt (unless the amount you’re claiming is $300 or less, in some instances).

Work-related tax deductions may include:

  • Vehicle and travel expenses
  • Uniforms, as well as occupation-specific and protective work clothing, including footwear
  • Working-from-home expenses, including electricity, phone and internet costs. Note, a short-cut method for claiming these deductions will apply again this year (more info on this below)
  • Education costs relevant to your jobs, such as course fees, textbooks, memberships and subscriptions
  • Tools and equipment, such as sunscreen and sunglasses if you work outside, or laptop and relevant software if you work in an office or home office.

See the ATO’s occupation and industry-specific deduction guides for more information on deductible items related to your specific industry.

Meanwhile, if your expenses are for both work and personal use, you can only claim a deduction for the work-related portion, which could, for instance, be 50% of your phone and internet bundle.

Another example might be if you go on an interstate study trip or conference but are taking a holiday at the same time, you wouldn’t be able to claim the entire trip as a work-related expense.

Additional deductions you may be able to claim:

  • Certain personal super contributions if you’ve made any
  • Interest, dividend and other investment-related expenses
  • Gifts and donations to deductible gift recipients, such as charities
  • Last year’s tax return fee, if you engaged a tax agent.

If you’re having trouble keeping track of all your receipts, checkout the myDeductions tool in the ATO app. This allows you to save a record of your deductions throughout the financial year, which you can then upload at lodgement time.

5. Lodging your individual tax return

With all your information ready, it’s time to lodge your tax return. No matter how simple your tax return, income tax is complicated and, at times, confusing. 

The simplest mistake could see you miss out on a refund or even have to pay a fine. Consider using a registered tax agent if you want to maximise your refund and take some of the stress out of tax time. Here are some ways you could lodge a tax return:

6. Use a tax agent

Over 74% of people who lodge a tax return choose to do so through an accountant or tax agent, and it’s not difficult to understand why. Every profession has its nuances, especially when it comes to claiming deductions. 

A tax agent understands the ins and outs of occupation-specific deductions and will know what questions to ask to help you make the most of your tax. Best of all, the fee you are charged is tax-deductible on next year’s tax return.

With 470 offices nationwide, we’re just around the corner. Our tax agents can walk you through the tax refund process with ease. In addition, we offer expert and personal service year-round at a location near you. 

7. Lodge online yourself

Available online 24/7, you can choose to do your tax return online, whenever and wherever it suits you. Just answer the questions online, review your results, and authorise them to lodge your online tax return with the ATO.

Capital Gains Tax (CGT)

1. What is Capital Gains Tax?

If you buy shares, property, or other assets for one price and sell them for another price, the difference between the amounts is your capital gain or a capital loss.

If you receive more for your assets than you paid for them, you’ll have made a capital gain, and you may need to pay Capital Gains Tax on it.

2. How much Capital Gains Tax will I pay?

The amount of Capital Gains Tax you’ll pay depends on factors including how long you’ve owned the asset, what your marginal tax rate is, and whether you’ve also made any capital losses.

Your marginal tax rate is important because your capital gain will be added to your assessable income in your tax return for that financial year.

The length of time you’ve held your asset is relevant because if you’ve held shares for over 12 months, for example, you can usually get a 50% discount on your capital gain.

3. What is a CGT event?

Selling assets, such as shares or investment property or transferring them to someone else, triggers what’s called a ‘CGT event’.

The CGT event marks the point when you make a capital gain or incur a capital loss.

Other CGT events could include a managed fund in which your units distributes a capital gain to you.

You can find out more about CGT events on the ATO website.

4. What happens if I make a capital loss?

You’d make a capital loss on your assets if you sold them for less than you paid for them.

If you make a capital loss, you can reduce a capital gain in the same financial year.

If your capital losses are greater than your capital gains, or if you make a capital loss in a financial year in which you don’t make a capital gain, you can generally carry the capital loss forward and deduct it against any capital gains you make future years.

5. What happens if I inherit assets?

A CGT event is generally only triggered when you sell inherited assets.

If the person who passed away bought the assets after CGT was introduced on September 20 1985, then the person inheriting the assets will need to determine the cost base. Depending on the asset, the cost base could be:

  • The existing cost base of the deceased person who originally bought the assets; or
  • The market value of the assets at the time of death

If the person who passed away acquired the assets before September 20 1985, then the person inheriting them is said to have acquired the asset at the time of death. In most cases, the cost base will then be the market value of the assets at that time.

Tax On Redundancy Payments

businessman with financial concerns

If you’ve recently been made redundant, it’s important to understand how you’ll be taxed so you can make the most of your redundancy payment.

You might be entitled to receive concessional tax treatment that wouldn’t otherwise be available if you left your job for other reasons.

Understanding redundancy payments

For tax purposes, the Australian Taxation Office (ATO) treats payments received upon termination of employment differently, depending on the type of payment received. In particular, a ‘genuine redundancy’ payment is taxed differently from other termination payments.

You don’t normally have to pay tax on a payment that meets the ATO‘s definition of genuine redundancy, up to a tax-free limit. 

The tax-free limit, which changes every year, is a base amount, plus an amount for each full year of service with your employer. After that, any remaining genuine redundancy payment is taxed at concessional tax rates up to a capped limit, indexed annually (the ETP cap).

Generally, redundancy is considered ‘genuine’ if it meets the following criteria:

  • You’re dismissed because your employer no longer requires the job you were doing as part of its business or structure; and
  • You’re under the normal retirement age

A termination payment won’t be considered as a genuine redundancy payment if:

  • You left your job because you reached retirement age
  • You chose to resign
  • Your employer terminated your job contract
  • Your employer dismissed you because of disciplinary or competency issues

What counts as a ‘genuine’ redundancy payment?

In the event of genuine redundancy, depending on your employment agreement, here are some examples of amounts that may be included as part of a concessionally-taxed genuine redundancy payment and amounts that may not:

Included

  • Payment instead of the required notice period
  • A severance package, such as additional payments based on length of service or unused sick leave
  • A ‘golden handshake.’ 

Not included

  • Unpaid salary, wages or allowances for work already done
  • Lump-sum payments of unused annual leave or long service leave
  • Payment in place of superannuation benefits

Since your termination payment may consist of a few of these components, it can be helpful to know about the different tax treatments for each component.

Here’s a summary of which components are taxable and which aren’t:

Component of payment

  • Genuine redundancy payment (up to a limit)
  • Remaining genuine redundancy payment (any money above the tax-free limit), known as employment termination payment (ETP)
  • Other

Tax treatment

  • Tax-free
  • Taxed (at concessional rates up to the ETP cap)
  • Taxed

FAQs

1. I have to buy tools and equipment for my job. What can I claim on my tax?

You can claim expenditure incurred in replacing, insuring and repairing tools of the trade that you use for earning your income. However, if the cost of any item is more than $300, it will have to be depreciated (i.e. claimed over its useful life). 

The amount you can claim will depend on what receipts you have kept and to what extent you use them for income-producing purposes. If you are in a situation where you are wondering what you can claim without receipts, you can claim less than $300 without proof of purchase.

2. Can I claim a deduction for sun protection items?

A deduction is available for outdoor workers who buy sunscreen lotion, sunglasses and hats for use at work. However, the claim must be substantiated and apportioned for private use.

3. Am I entitled to claim $300 for work-related expenses as this does not have to be substantiated?

You cannot just claim $300. You must incur any expense before it is claimable. Whilst you may not need receipts for expenditure up to $300, you must have spent the money, which must be relevant to your employment.

4. I have been thinking about salary sacrificing money into my superannuation account? Is there a limit to how much I can salary package?

Your employer pays amounts paid into superannuation to meet the Superannuation Guarantee obligations, and amounts paid under a salary sacrifice arrangement are called concessional contributions.

Salary sacrificing into super involves asking your employer to redirect a portion of your pre-tax pay into your super fund. These contributions are taxed at a rate of 15% in the super fund. For most, this is a lower tax rate than their marginal tax rate.

The concessional contributions cap per annum, per individual, is $27,500. If the total of your employer super guarantee contributions and salary sacrifice contributions go over this cap, you may have to pay extra tax.

Check your employment agreement or speak with your employer before arranging salary sacrifice into super.

5. I am over 60 years of age and retired. Will my superannuation pension be tax-free in future?

People who have reached 60 no longer pay tax on superannuation income streams (pensions or annuities) paid from a taxed fund. A taxed fund is one where contributions tax was paid on the contributions made by your employer into your super fund on your behalf.

Contributions tax would also have been paid for contributions made under a salary sacrifice arrangement. Most funds are taxed funds. However, taxpayers who belong to an untaxed super fund will still have to pay tax on their superannuation income stream, irrespective of their age.

Taxpayers over 60 years of age (for the full financial year) and receiving a superannuation income stream from a taxed fund no longer receive a PAYG Payment summary.

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