Tax returns are difficult, time consuming and a pain in the neck. For many people, qualified accountants are the answer, no matter how expensive they are. However, other people can’t afford to use accountants or tax agents to lodge their tax return, and this can lead to mistakes.
Even if you have lodged your tax return correctly, and have fulfilled all of your legal requirements under Australian law, you still might be losing a lot of money due to an incorrect tax return. You may have forgotten to claim certain work related expenses, or you may have forgotten that you could claim some things altogether. Our top 5 things that people could be claiming on their tax returns, but aren’t, include:
- Travel expenses
If you or your employees travel for work, you can claim any travel related expenses. This includes things like aeroplane or bus tickets, accommodation and food. Make sure that you keep any receipts, and note that you can only claim these things if the sole purpose of the trip is business.
- Charity donations
A lot of people either don’t realise that they can claim charitable donations on their tax return, or they simply forget to do so. For someone who donates even small amounts to charity every year, it is definitely worth claiming your donations as a tax deduction. Sure, it might not save you a whole lot, but it will lower your taxable income, and it will reduce the amount of tax you have to pay.
- Tax agent fees
A lot of people don’t realise that tax agent costs are actually tax deductible. If you used an accountant or a tax agent to lodge your tax return last year, you can claim their cost back on your tax return. For people who are hesitating to use a tax agent to work out their tax return, this can be all the motivation that they need.
- Vehicle expenses
If you use your vehicle for work or work related purposes, you can claim vehicle expenses on your tax return. Note that you can only claim expenses incurred while you are working, so it is a good idea to keep a log book for a couple of months. You accountant or tax agent will be able to advise you on this.
- Mobile phone usage
If you make or receive work related phone calls on your mobile phone, you will be able to claim at least a portion of your phone bill. Like with vehicle expenses, you can’t claim personal use costs, so it is a good idea to keep a phone log book as well, so that you can determine how often you actually use it for work related purposes.
There are a lot of things that you potentially could be claiming on your tax return, but probably aren’t. These things include common everyday costs, and if you do start claiming them, you will find that your taxable income will probably decrease dramatically. Do your research and speak to your accountant to find out what you could be claiming today!