Besides making sure you have accurate records of your annual income, the answer is to make sure you claim all the tax-deductible expenses for which you are eligible.
Ideally you will have been keeping track of your eligible expenses (and collecting receipts) throughout the year.
Use your mobile phone to track your receipts
Make it a ‘new (tax) year’s resolution’, to get your phone out whenever you make a deductible purchase, take a photo of the receipt and pop it into a separate album for tax time.
If you are claiming more than $300 in expenses, you need to have proof that you spent the money and taking photos of the receipts on your phone makes this much easier! If your claim is less than $300, you still need to show how you got the figure, but you don’t have to have written evidence.
The ATO suggests that you keep all records for at least five years if you’re claiming depreciation of assets, or the acquisition/disposal of an asset. For simple tax claims, records need only be kept for two years.
Claims relating to your car, meal allowances or travel allowances, have different rules.
What deductions you can you claim for?
Here is a list deductible expenses that you may be able to claim (and must therefore keep the receipts for), depending on your situation.
1. General expenses
- Tax agent fees including tax return preparation
- Income Protection costs
- Charity Donations
- Private health cover - your private health fund will send you an annual statement, or you can ring and ask them, or check at their website if you have a login.
2. General work-related expenses
- Professional membership fees
- License/certificate fees
- Union Fees
- Gifts
3. Education expense
- Course fees including textbooks
- Related travel costs
- Accommodation and meals when required to stay away from home
- Professional libraries and work-related magazines
4. Work related equipment purchase or lease
- Calculators and electronic organisers
- Computer related consumables
- Computers and laptops
- iPad & similar small electronic equipment
- Phone, mobile and phone accessories
- Software
- Briefcases and carry-bags
- Safety equipment – e.g.sunscreens, hard hats, harnesses, safety glasses
- Sunglasses (if you work outside)
- Technical instruments
- Tools of your trade
Note: For purchases over $300 you will need to claim a deduction for their decline in value (formerly known as depreciation) over a longer period rather than claiming the purchase price in full on your next return.
5. Work related travel
- Tolls
- Personal car or vehicle costs
- Parking Fees
- Public transport fares
- General travel expenses, including flights, taxis etc.
- Accommodation and meals (if working away from home overnight)
6. Home office expense
- Desks chairs and other office furnishings
- Office equipment
- Home office running costs (electricity, internet usage)
- Stationery
- Postage
7. Clothing purchase and maintenance
- Protective clothing
- Uniforms (with logo)
- Laundry of work uniform and protective clothing
8. Newly acquired asset costs eg. a rental property
9. Expenses records for rental properties or other investments
10. Records of recently disposed or sold assets
11. Expense records related to any disability aids, attendant care or aged care
