The documents you need at Tax Time to maximise your Tax Refund.
“Preparation is the key to you achieving the best tax refund legally possible, and ensuring you’re covered should the ATO ask to review your tax return” – Corinne Cole, Co-founder of Platinum Accounting & Taxation
As the financial year comes to a close and your 2019 tax return falls due, do you find yourself madly rummaging through drawers and files around your home, in desperate search of receipts for your tax return?
Or perhaps you’re unsure of what documents you need to have in preparation for your tax return appointment?
To take the stress and pain out of tax time, we’ve compiled a 2019 Tax Return Checklist and guide below to help you get ready for your 2019 tax return appointment.
Check last year’s tax return
Your previous year’s tax return can serve as a guide to help you prepare for your 2019 income tax return.
This will help prompt you as to which categories of income, tax deductions and tax offsets are likely to apply to you when preparing your current year tax return.
If it’s your first time having us prepare your tax return, we recommend that you bring a copy of your previous year’s tax return to your appointment.
Make a list of all your income sources
It might seem obvious that you need to include all salary and wage income you receive from your employment.
- But are you aware of the other common income types you must report in your tax return? These can include:
- Super pensions and annuities
- Government pensions and allowances such as New Start Allowance and Parenting Payment
- Investment income (this includes bank interest, dividends on shares, rental income and cryptocurrency)
- Capital gains (profits on investment assets sold, such as shares, real estate or cryptocurrency)
- Business, partnership and trust income, including managed funds
- Foreign income
- Income from the sharing economy (examples include Uber, Airbnb and Airtasker)
- Crowdfunding income (this could include donations received to fund a venture in which you intend to make a profit)
- Other income, including insurance payments and compensation, and discounted shares under employee share schemes. If you’re unsure of what constitutes income, please speak with us.
Don’t rely on the ATO’s prefilling report
As registered tax agents in Melton, we can access your data that has been prefilled by the ATO. This data can include details of your PAYG Payment Summaries, government payments, bank interest and dividends. This information will usually be accurate, but it is not guaranteed to be complete.
Before booking your 2019 tax return appointment, take a moment to think about all the possible income sources that may have been applicable to you between 1 July 2018 and 30 June 2019.
Tax deductible expenses that you may be able to claim
Consider whether any of the following expenses may be applicable to your employment income or other assessable income. The tax deductibility of an expense will depend on the records and written evidence you’ve retained as well as its connection to your employment.
- Use of your own vehicle for work-related travel
- Other work-related travelling expenses (car parking, tolls, accommodation)
- Purchase of protective clothing or uniforms
- Sun protection expenses – sunscreen, sunglasses
- Self-education expenses (these must be related to your current job)
- Home office running expenses
- Telephone expenses
- Depreciation of tools, business equipment, percentage of computer
- Tools of trade
- Subscriptions to trade magazines
- Union fees
- Investment Related Expenses
- Account keeping fees and ongoing management fees
- Interest on borrowing to buy shares
- Advice relating to changing and managing investments (but not setting them up)
- Investment publications (excluding ordinary newspapers)
- Donations (must be made to a deductible gift recipient)
- Income Protection Insurance Premiums (this is not claimable if your policy is held in your super fund)
Keep your receipts and tax invoices throughout the year
With the ATO announcing that it will be ramping up its audit activity of individual taxpayers in 2019, keeping receipts is crucial in the preparation of your 2019 tax return. You need to be able to prove or substantiate your deductions. This usually means keeping receipts or tax invoices to evidence the amounts you have spent.
Receipts are prone to fading, damage and being misplaced. And the ATO will not accept this as a valid reason for you not having receipts as proof of expenditure.
We recommend you use the ATO’s myDeductions app. The myDeductions app allows you to record expenses, deductions, log vehicle trips, record income for sole traders, and take photos of your invoices and receipts.
Expenses you can claim without receipts… but be careful!
To be able to claim a tax deduction for a ‘work expense’, three requirements must be satisfied:
- You must incur the expense
- The expense must be directly connected to the gaining or producing of your income
- You need to be able to substantiate the expenses with written or documented evidence
However, there are some exceptions to the general substantiation rule. These exceptions generally allow you to claim certain work-related expenses without obtaining written evidence, and include claims for deductible:
- work expenses not exceeding $300
- laundry expenses not exceeding $150
- travel allowance expenses for domestic and overseas deductible travel expenses;
- overtime meal allowance expenses; and
- car expenses under the cents per kilometre method.
If your total claim for work related deductions is under $300 you are not required to keep written evidence.
…But please beware!
In the event of an ATO audit, you will still be required to explain and demonstrate on a reasonable basis how your claim was calculated or determined. Yes, this is even though written evidence is not required. In an audit situation you would need to be able to prove your expense claim using bank statements or diary records.
Claiming Home Office Expenses
Where part of your home is genuinely used for work purposes, tax deductions may be available for running expenses such as electricity, gas, cleaning and depreciation of office furniture and equipment. It is possible for home office expenses can be claimed without receipts or utility bills. From 1 July 2018 you can claim 52 cents per hour to cover certain expenses, however you need to keep a four-week diary of home office usage as substantiation.
Claiming motor vehicle expenses
You do not need written evidence to claim motor vehicle expenses if you are using cents per kilometre method. But this doesn’t mean you can brazenly claim the full 5000 kilometres. You still need a reasonable basis for working out your claim. There are two methods for claiming car expenses; the cents per kilometre method and the logbook method. The cents per kilometre usually provides the best deduction where your work-related trips are infrequent.
If you own a Rental Property, you will need these documents for tax
- Rental Summary from your property agent– or if not using an agent, your record of rent received
- Interest paid on loan (the total interest is often accessible through online banking or on your June bank statement)
- Depreciation report from a quantity surveyor. We recommend BMT Tax Depreciation
- Repairs and maintenance (please create an itemised list with receipts as not all repairs and maintenance are immediately tax deductible)
Other tax-deductible rental property expenses may include advertising, cleaning, gardening, pest control, council and water rates, insurance, property agent fees, printing, postage and stationery. Our comprehensive Rental Property Tax Checklist will help you prepare for your 2019 tax return.
Additional information you should bring to your tax return appointment
- Private health insurance statement
- Bank Account details for your tax refund (BSB, Account Number and Account Name). The ATO stopped issuing cheques many years ago now.
- Spouse details including their date of birth, taxable income, fringe benefits, and reportable super contributions
- Any other information that you may consider relevant or you’re unsure of.
Our experienced accountants, located in Melton, are ready to help you with your tax return. Are you ready to book your 2019 tax return appointment? Call us on (03) 9746 6479. Don’t have time for an appointment? That’s ok, you can have us prepare your tax return online.