Tax time doesn’t have to be stressful for patient taxpayers with their ducks in a row. Photo: TND
The end of financial year (EOFY) is rapidly approaching, and for millions of Australians that means tax-time stress is on the horizon.
A YouGov survey this week, commissioned by Intuit QuickBooks, found almost a third of Australians find EOFY to be one of the most stressful times of the year.
But it doesn’t have to be, and if you do it right there’s a potential pay day headed your way.
Here are three tips to make tax time 2022-23 a smoother experience for your family this year.
Get your ducks in a row
With July 1 still more than a month away, the first step to ensuring a stress-free tax time this year is getting ahead and ensuring you have everything you need when the time comes.
Jimmy Nguyen at DKM Accounting says taxpayers should start organising their expense claims for the year complete with evidence such as receipts, and plan any end-of-financial year spending.
“In terms of the documentation that you need to keep records of, the things that remain deductible as years go on they’re generally the same,” Mr Nguyen explained.
“There are always work-related deductions, donations and other payments you may have made.”
Mr Nguyen explained the big difference this tax time will be for people who work from home.
“It has been tightened up,” he said.
The old COVID-era shortcut method that allowed taxpayers to simply claim an 82 cent per hour tax deduction on work-from-home expenses has expired and can no longer be used this year.
Instead, a new revised fixed rate is available that will require deductions on equipment to be separated from expense claims related to bills like electricity and internet.
Australians who work from home will also need to provide additional information on their tax returns this year which, as The New Daily has explained previously, includes real-time work diaries and digital copies of any relevant utility bills.
Ask your boss
With experts concerned that many taxpayers working from home won’t have kept real-time diaries of their hours this year, Mr Nguyen said it could be a good idea to ask your boss.
“Work with your employer to provide evidence that you do work from home,” he said.
The tax office has previously confirmed to TND that employer records such as time sheets or rostering information can be used to substantiate WFH claims.
But they have warned that records must be compiled in real time, not retrospectively.
There’s no rush
Perhaps the most pivotal way to take the stress out of tax time is patience.
Mr Nguyen explained that taxpayers who try and file their returns on July 1 will have a much tougher time and incur more ATO scrutiny than those who wait a few weeks.
That’s because much of the information automatically filled in your tax return by the ATO, including key details about your employment and income, is unlikely to be available yet.
“Most of the bigger financial bodies, whether it’s your health insurance, bank, investment funds and all that do get a grace period for when they share that information [with the ATO],” Mr Nguyen said.
“I usually tell my clients – don’t bother talking to me until July 15.”