Maximise Your Tax Refund with These Tips for Australian Families
- Parents Only
Are you looking to save and manage your family's finances better this tax season? Here are some timely tips, insights, and updates that could prove beneficial.
According to a recent Finder survey, a significant number of Australians are waiting to lodge their tax returns, using this much-needed cash injection to tackle rising household expenses and essential bills. If you're among the 23% who consider the end-of-financial-year refund crucial to your family budget, these pointers can help maximise your return.
Boost Your Family Budget: Navigating the Tax Season Made Easier for Aussie Parents
The study reveals that 15% of respondents, equating to about three million people, intend to use their tax return to pay household bills, while others aim to reduce mortgage payments. More than a third (36%) plan to put the refund into savings. Given the average tax refund of $2900, this could mean $20.8 billion heading to savings accounts this tax season.
Finder's money expert Rebecca Pike advises families to consider strategic investments for their tax refund.
Instead of succumbing to temptation and spending it all, look at placing it in a high-yield savings account or starting an investment journey for long-term wealth creation.
Fewer respondents (4%) plan to use their tax return to pay off credit card debt and only a small number will use it for holiday expenses (5%) or shopping (3%).
Navigating Tax Deductions: New Rules and Adjustments
To get the most out of your tax refund, experts recommend not just relying on the pre-filled data from the Australian Taxation Office (ATO). As H&R Block's director of tax communications, Mark Chapman, points out, the pre-filled information may not always be the most reliable or complete, especially early in the tax season.
Changes have also been made in claiming work-from-home deductions.
The ATO has introduced a more streamlined "fixed rate method" to replace the "shortcut method". This change means you'll be able to claim 67 cents per hour while working from home, an increase from the standard rate of 52 cents per hour.
But with these changes come new rules, warns Brenda Ferguson, managing director of Impact Taxation and Financial Services. People will now need to keep a detailed daily diary while working from home. Those who fill out timesheets or have rosters will be able to use those as evidence instead of a diary.
Who is the ATO Targeting this Year?
The ATO has recently unveiled its three key focuses this year: rental property deductions, work-related expenses, and capital gains tax. If you're a rental property owner, you'll want to make sure you're correctly apportioning loan interest expenses and correctly claiming property-related deductions.
Finally, for capital gains tax (CGT), which applies when you dispose of assets such as shares, crypto, managed investments or properties, it's crucial to calculate a capital gain or loss for each asset unless an exemption applies.
Navigating the tax season can be challenging, but being informed and prepared can help you make the most of your return, allowing you to maximise your family's savings and financial stability.
Here are some additional tips to help you get the most out of your tax return:
- Start planning early. The earlier you start, the more time you'll have to gather all of your documents and make sure you're claiming all of the deductions you're entitled to.
- Use a tax agent. If you're not comfortable doing your own taxes or if you have a complex tax situation, it's a good idea to hire a tax agent. A tax agent can help you save money by ensuring that you're claiming all of the deductions you're entitled to.
- Keep good records. It's important to keep good records of all of your income and expenses throughout the year. This will make it easier to do your taxes when the time comes.
- Be honest. It's important, to be honest when you're doing your taxes. If you're caught lying to the ATO, you could face serious penalties.
By following these tips, you can make sure that you're getting the most out of your tax return and that you're in compliance with the law.
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