Tax time is here again for 2024. This year, the Australian Taxation Office (ATO) https://www.ato.gov.au/media-centre/ato-flags-3-key-focus-areas-for-this-tax-time has announced it will be taking a close look at these three common errors being made by taxpayers:
1. Incorrectly claiming work-related expenses
2. Inflating claims for rental properties
3. Failing to include all income when lodging.
The ATO’s website also states they want to help taxpayers in 2024 lodge their claims correctly, so they’re placing emphasis on accuracy and completeness. At Colledges, we’re here to help you get tax time ready for 2024, and lodge a tax return that is accurate and gives you the best refund you’re entitled to. Below we’ve compiled our annual checklist for you to review before you pop in to see us.
What is a tax deduction?
A tax deduction reduces the income that is subject to tax, but it’s important to ensure you’re claiming only eligible expenses that can be substantiated. With the ATO taking a closer look this year, it is important to ensure that all your records are accurate and clear.
To claim an expense as a tax deduction, the expense must:
- Relate directly to earning your income
- Be related to expenses to do your job or run your business, not related to private use (if the expense is both private and business, then only the business portion can be claimed as a tax deduction)
- Have receipts, logbooks and/or records to substantiate it.
Before you see your accountant, take the time to gather all your receipts, logbooks, statements, and other records. We’ll run through these items with you and help identity anything else that can be claimed as a tax deduction.
Getting ready for tax time 2024
Essentially a tax return details two things: money earned, and money spent related to your work. It’s not uncommon to overlook what can be claimed and miss out on a tax deduction. It’s also not uncommon to overstate expenses not completely related to your work.
Each year we update the Colledges “tax time ready” checklist to help you to ensure your tax return includes everything you can claim, to lodge an accurate return the first time, and to give you the best tax return possible.
Please use this list to check off applicable items for your 2024 tax return.
PROVIDE RECORDS OF INCOME SOURCES
Here is a list of the most common sources of income, each of which must be included in your tax return.
Your salary/wages
- Your PAYG salary or wages
- Allowances, bonuses, commissions, tips, director’s fees etc
- Employer lump sum payments
- Employment termination payments
Interest earned
- Distributions from trusts, partnerships, managed superfunds
- Superannuation lump sum payments
- Foreign source income (including foreign pensions) and foreign assets or property
- Bonuses from life insurance companies or friendly societies
Investment income and capital gains tax (CGT)
- Income from investments
- Dividends
- Rental income from properties
- Profits from the sale of assets like real estate, shares, or other investments, subject to capital gains tax (CGT).
Personal or government allowances
- Car and vehicle allowances
- Travel allowances
- Work from home allowance
- Other allowances, such as entertainment, meals etc.
- Pensions and allowances
- Australian Government allowances and payments such as Newstart, JobSeeker, Youth Allowance, Austudy, Family Tax Benefit
- Australian Government pensions
- Australian annuities and superannuation income streams
- Australian superannuation lump sum payments
- Attributed personal services income
Other sources income
- Child support
- Income from investments such as rental income, shares, dividends, cryptocurrency
- Employee share scheme
- Net income or loss from business
LIST YOUR EXPENSES WITH RECEIPTS
Expenses that are tax deductible are any item or service purchased that you or your business required to help you earn an income.
Employment expenses
- Travel costs – national and international
- Training costs
- Work from home expenses
- Courses, education and seminars
- Superannuation contributions
- Notice of intent to claim for superannuation contributions
- Protective clothing and uniforms
Vehicle expenses
- Motor vehicle expenses based on business use percentage (include your logbook, if applicable)
- Travel and accommodation – domestic and overseas
- Vehicle expenses based on logbook method or cents per km
Office expenses
- Home office expenses
- Computer and software
- Telephone, mobile phone, internet
- Utilities – gas, water electricity
- Tools and equipment
- Building and maintenance costs
- Subscriptions and union fees
- Journals/periodicals
- Depreciation of office equipment
- Sun protection products (i.e., sunscreen and sunglasses)
Other expenses
- Interest deductions
- Dividend deductions
- Gifts or donations
- Cost of managing tax affairs
- Freight and transport costs
- Health and medical expenses and insurances
- Childcare expenses
A note on working from home expenses
The ATO describes working from home as carrying out your required work duties for your employer that you would normally do at the office, in your home. As an employee working from home, you are required to keep records which includes a logbook of your working day with start and finish times including your breaks. You can also claim a portion of utilities used and if you pay for items yourself that are not reimbursed such as stationery or technology expenses, these can also be included in your tax return.
Find out more here:
Give us a call to help you prepare your 2024 tax return
We’re here to help guide you to prepare an accurate and complete tax return where all your relevant expenses are included and so that you don’t miss out on any refunds due. With the ATO looking closely at landlords and people working from home, we’ll work with you to lodge a timely and accurate tax return. Give us a call on (03) 9851 6500 or email us at hello@colledges.com.au.
