Everything you need to know before the tax > October 31
If you plan to file your taxes yourself, you should be aware that the time to file your return is now less than two weeks.
Boosted by the government’s Low and Middle Income Tax Offset (LMITO), which is effectively a tax cut of up to $1,500 paid when your tax return is filed, millions of people have already filed their 2022 return. But still there are many more to stay; for some of them, the clock is rapidly counting down.
With millions of dollars of unclaimed refunds on the table, it makes sense to take action now to get your return as soon as possible to recover any tax owed to you and take advantage of the LIMIT.
The last date for self-tenants to file their tax returns with the ATO is October 31, 2022. If you file after that date, you risk incurring a late filing penalty.
Taxpayers who use a fiscal agent can usually file their return well beyond that deadline without penalty. The ATO grants tax agents extended terms on favorable terms, meaning they can file returns on behalf of clients until May 15, 2023 without incurring any penalties.
Generally speaking, about 70 percent of taxpayers use a tax agent, a figure that rises to more than 95 percent for small business owners. If you’re entitled (or think you’re entitled) to claim deductions, either for your business or as part of your job, it makes sense to have an expert prepare your return to make sure you’re claiming all the deductions to which you’re entitled. a.
If you think you may not be able to meet the >October 31st, you should now consider visiting a fiscal agent. You MUST be registered with the agent before October 31 in order to benefit from the extension of the term.
Self-tenants who fail to file by October 31 could receive an immediate late filing penalty of $222, which increases an additional $222 for each successive 28-day period the return remains pending, up to a maximum of $1,110. If you still don’t file once the maximum penalty is reached, the ATO can either issue you a default assessment (in effect, an estimate of what the ATO thinks your income is), or they can prosecute you. Penalties are generally not applied when the ATO owes you a refund or if you have a void return.
With only a few days to go, you may be feeling the pressure if you haven’t started your comeback yet. My key advice is that you should really consider using a tax agent, especially if you have been unable to complete your return thus far due to the complexity of the task.
Haven’t filed your 2021 statement yet?
The bad news is that if you have an outstanding return from a prior year, such as 2021, you can’t take advantage of the extended tax agent deadlines for your 2022 return, even if you use a tax agent.
Therefore, you MUST file this year’s return by October 31, 2022 to avoid a late filing penalty.
And, while you’re at it, it makes sense to do prior years’ returns as well. Don’t worry if you are missing information about your income and/or deductions from those prior years. Your tax agent will usually be able to help you by drawing on the information the ATO already has and advising you on what deductions you can claim.
What could I claim on my 2021-22 tax return?
There are literally millions of dollars on the table in unclaimed deductions, either because taxpayers don’t realize they can claim a particular deduction (having a tax agent like H&R Block should help figure this out!) or because they don’t have records to substantiate a claim. Here are some common but often overlooked tax deductions you may be entitled to.
Trip
Generally, you cannot claim the cost of commuting to and from work. The only exception to that rule is if you have to carry bulky equipment to and from work because there is no secure place to store it at your workplace.
You can claim the cost of traveling between two workplaces, such as between two offices or two stores. This includes public transport and taxi costs. Also, you can claim the cost of traveling between two different jobs, as long as you don’t return home in between.
If you plan to use your own car for work purposes, you can claim a flat rate of 72 cents per kilometer (for 2021-22) for all work trips, or you can claim the actual expenses incurred. If you choose the latter, you’ll need to keep receipts for all costs (including road tolls and parking fees) and also keep track of all your trips for a 12-week period.
If you were lucky, between the COVID-19 lockdowns, you may have taken some tax-deductible interstate travel during the year. The cost of flights is tax deductible if they are for business purposes. When it comes to claiming meals, you can only do so if the expense is due to your absence from work. The same applies to accommodation and incidentals.
Professional development
You can claim college or TAFE expenses to the extent the course is related to your current employment and you are not reimbursed. You can also claim associated costs such as textbooks, school trips, and stationery.
If you need to undertake continuing professional development to stay current with the latest practices in your trade or profession, these costs will also be deductible to the extent they are linked to your current job.
However, you cannot apply for a pre-professional course (a course you take to enable you to get a job in a particular field).
Working from home
As a consequence of COVID-19, you may have had to move your work activity from a commercial premises to your home for at least part of the last financial year. If so, you can claim a rate of 80 cents per work hour, so you will need to keep track of the number of hours you have worked from home as a result of COVID-19. This applies until June 30, 2022.
If you use the 80 cents per hour method, you can’t make any other claims related to working from home, so things like cell phone and internet use are included in the 80 cent rate.
The alternative rate of 52 cents per hour may be more appropriate. This doesn’t include phone costs, home internet, or the cost of writing off home IT equipment (such as the cost of buying a laptop to work from home), so when you make separate claims for those expenses, it is possible that your total claim is higher. Your tax agent will be able to advise you on which method produces the best results.
Any other tax tricks? increase yields?
Even if you have incurred any of the above expenses, the rule of thumb is that you cannot file a claim unless you can prove that you spent the money (and also that your employer did not reimburse you). So make sure you keep all relevant receipts, bills, bank statements and credit card statements. If you’re not sure if you can file a claim, save the receipt anyway and discuss it with your H&R Block tax agent.
ALSO READ: Key dates for Australian SMEs to mark on their financial calendars in 2022
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Disclaimer: espanol does not provide tax, legal or accounting advice. This article has been prepared for informational purposes only by our contributor and should not be relied on solely for tax, legal, or accounting purposes.You are strongly encouraged to consult your advisors to determine how the information may relate to you or the specifics of your business.