This one of the most popular questions during tax time.
If you don’t want to come to your accountant and ask the same question. Get ready for your tax returns this coming financial years to avoid “paying too much tax”

Here are the 5 tips to boost your tax refund

1) Declare your income

Your income statement will show the income you have earned through your employer(s). JobKeeper payments are treated as your normal taxable income from your employers and Centrelink respectively and will be included by the ATO in your tax return
Income protection, sickness and accident insurance payments, redundancy payments, leave payments are also included in your tax return
If you have received access to your superannuation due to Covid-19, you will not need to pay tax on these amounts and will not need to include these payments in your tax returns.
Tip: If you don’t include all your income, there might be a chance the ATO will pick it up and send you an amended Notice of Assessment with additional tax to pay plus interest. So it is important to include all your taxable income during the financial year.

2) Keep all tax receipts for work related expenses

You need receipts for tax deduction claims, you cannot claim tax without having adequate receipts, your tax deductions will be rejected, and you will end up paying more tax than you have to.
The best way is to regularly collect all your tax receipts, take photos and put them all in a folder ready to send to your accountant.
Tip: Think about it as your discounted voucher or cash rebate for what you have spent. It will give you more motivation to do it properly.

3) Make sure you claim all tax deductions

A rule of thumb is that if any expense relates to your earning income, then it will be likely tax deductible.
From general expenses e.g. Tax agent fees, income protection, private health insurance, donations
For work related expenses e.g. tools, professional membership fees, computer, phone, software etc..
And Home office expenses e.g. office equipment, desks, chairs, stationery etc.
Tip: If you are unsure of what you can claim, keep your receipts anyway so you can check with your accountant when you do your tax return.

4) High income earner? Obtain private health cover

if your income is more than 90k for single and 180k for family as you need to pay an extra 1% Medicare levy surcharge. It might be more expensive than a basic private health cover.

5) Find a tax accountant who is up to date with Tax Law

Tip: Treat the fee you pay your qualified accountant as an investment instead of a cost as the fee is usually low compared to what you might be missing out when you are unsure of what to claim in your tax return.

The Taxable Payments Annual Report (TPAR) is an industry-specific report through which businesses inform the ATO of the total payments made to contractors for services in that financial year. This information is then used by the ATO to match the contractors’ income declarations to improve their compliance efforts.

The ATO estimates that around 280,000 businesses are required to lodge a taxable payments annual report (TPAR) for the 2019–20 year, following the regime’s extension last year to businesses providing road freight services, information technology services, and security, investigation or surveillance services.

Businesses providing building and construction, cleaning, or courier services are also required to lodge a TPAR.

With the annual 28 August deadline now well overdue, the ATO has confirmed that more than 60,000 businesses have yet to lodge their TPAR, with failure-to-lodge penalties looming.

ATO assistant commissioner Peter Holt has urged these businesses to lodge immediately, noting that the taxable payments reporting system (TPRS) aims to create a level playing field for contractors.

“As any good tradie will tell you, the spirit level is a critical tool to ensure construction work is being done on the level,” Mr. Holt said.

“I like to think of the TPRS as a bit of a spirit level for tax obligations. Our role is to make sure the ‘bubble’ is centered as much as possible to keep things on the level and fair for everyone.”

Mr. Holt also believes that many more businesses might be captured under the TPRS for the first time ever after COVID-19 forced businesses to pivot to a delivery service model.

“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers,” Mr. Holt said.

“These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are 10 per cent or more of the total annual business income, you’ll need to lodge.”

Bookkeeping Tip:

Always make sure you have the name, ABN and business address of contractors you employ. Additionally make sure you check the veracity of their ABN here https://www.abr.business.gov.au/ and don’t pay the contractor without a valid tax invoice matching their GST status on the ABR register.