Most people are only interested in tax when they realise they can get a tax?refund here in Australia!
So I thought it might be handy to give some tips on ensuring you get the biggest tax refund possible…
The number one thing to remember is that you have to be classified as a resident for tax purposes to be eligible to receive a handsome amount of taxback. If you cannot be classified as a resident for tax purposes then you are likely to get a small Australian tax refund or even owe the Australian tax office money. It is a legal requirement to lodge a tax return here in Australia if you have earned money and paid tax on it and not everyone will achieve a refund from their tax return. The issue of tax residency is covered in other posts so have a dig and read around the subject there…
The next thing is…will you be getting all your taxback without doing anything other than declaring your gross earnings and the tax you’ve paid?
Usually people who’ve earned under $12 per year will get all their tax refunded to them after lodging a tax return in Australia. So if this is you stop worrying and just apply for your tax refund with us?now! You just can’t get more taxback than you paid in the first place (not everybody believes us when we tell them this!)
If you’ve earned over 12K or havn’t been here a full year then you may not be due all your tax back. So it’s time to use deductions, offsets and possibly a zonal allowance to help you get more tax-back.
Basically most of the stuff you spend on stuff for work can be used as a deduction, these reduce your taxable income and so you have to pay less tax (which means a higher tax refund). If your deductions are below $300 in total (as at 2011 financial year) then you don’t need receipts. If your total deductions are above $300 you’ll need copies of your receipts for us.
The most common deductions we see:
- Travel- You can claim for travel from one place of work to another, but not from home to work and back. So keep log books or fuel recepts only if you travel around allot for work…but don’t bother if you just go to one place of work and back home again.i
- Uniform- You can use the cost of uniforms as deductions, but they need to be specific to the place you are working at, it needs to have your name or the company name/logo on it…you can’t just say I bought this suit as I was a car salesman.
- Courses- If the course you took was related to your job (such as a barista course and you worked in a coffee shop) then you can use this cost to help you gain a bigger tax refund.
?So do I get the full amount of my deductions back?
Short answer is unfortunately no! As mentioned above tax deductions reduce your taxable income and so reduce the amount of tax you have to pay. What you save is the marginal rate of tax- that is to say the amount of tax you would have paid on the earning which the deductions account for. So if you deduct $300 and you were paying 15% tax on your earning you’ll get an extra $45 from your tax return because of your deductions.
?Zonal offset, WTF is that then?
A zonal offset is a tax offset which the Australian taxation office allows you on your earnings when you work in a remote location for a period of at least 6 months. We often come across people who have either worked in a remote location for a shorter time than 6 months and it doesn’t count for anything I’m afraid. We also see people who’ve worked places which they think are remote…but are far from it (Outer Sydney is not a remote loaction, even if you don’t get mobile phone reception!). There is a set list of areas classified as remote zones which we look up for you. A good place to start is the postcode of the place you worked in…In Australia the postcode starts at X000 in the center of the states capital and the number grows as the area moves away from it. So if you have a large number for a postcode there may be a chance of using a remote location offset to help you get a bigger tax refund.
?Dependant Spouse Offset
If you have a spouse who earned very little and was dependant upon you then we may ask you for more details as this could?get you more taxback.
If you spent over $2000 on medical expenses and aren’t due all your taxback give us the receipts and you can get 20% of excess back.