Tax return tips

Getting tax right

It's tax time again so here's our guide to what you can and can't claim in your Australian 2017 tax return, and tips to make lodging your tax on time a breeze.

Records you'll need to complete your tax return

Before you sit down to do your tax, you'll need to gather all the right information. Here are some of the documents you'll need to complete your tax return.

  • Payment summaries - Outlines the income you have received from your employer, super fund or government payment like Centrelink and the Department of Veterans Affairs.
  • Bank statements - Details any interest you have earned during the period and fees you have paid.
  • Shares, unit trusts or managed funds statements - Information on dividends or distributions you've received. Dividends that you've elected to reinvest must be declared as income.
  • Buy and sell investment statements - Needed to calculate capital gains and losses. If you bought or sold any shares you can access the details on your online broking account or you can get them from your investment adviser or stockbroker.
  • Records from your rental property - If you use a property manager you will probably get an annual tax statement that details income and expenses, otherwise you will need to gather details of income received and expenses paid, including any capital gains or capital losses from the sale of property.
  • Foreign income - Details of foreign pensions or other foreign income.
  • Private health insurance policy statement - Information needed to complete the private health insurance section of your tax return.

Income you must declare

You can do your tax online using myTax. You can access myTax through myGov or the ATO website.

Smart tip

If you wait until mid August the ATO will pre-fill most of the information from employers, banks, government agencies and other third parties into your tax return. All you will have to do is double-check the information is correct, enter any deductions you have and hit submit.

If you are lodging your tax return before pre-fill is complete, here's a list of common types of income that must be declared on your tax return.

  • Employment income
  • Super pensions, annuities and government payments
  • Investment income (including interest, dividends, rent and capital gains tax)
  • Business, partnership and trust income
  • Foreign income
  • Income from crowdfunding (for example donations received for a venture in which you intend to make a profit)
  • Income from the sharing economy (for example Uber or Air BnB)
  • Other income - including compensation and insurance payments, discounted shares under employee share schemes, some prizes and awards

Visit the ATO's website for more information on income you must declare.

Tax deductions you can claim

When completing your tax return, you're entitled to claim deductions for some expenses, most of which are directly related to earning your income (called 'work-related expenses'). A deduction reduces your taxable income, and means you pay less tax.

Video: Get your deductions right

Get your deductions right

Take a look at the ATO's video about the rules on claiming your deductions

Transcript: Get your deductions right

To claim a deduction for work-related expenses:

  • You must have spent the money yourself and not been reimbursed.
  • It must be directly related to earning your income.
  • You must have a record to prove you paid for it.

When your expenses meet these criteria, here's a list of the things you may be able to claim.

  • Vehicle and travel expenses - This does not normally include the cost of travel between work and home but if you use your car for work or work in different locations then you may be able to claim a deduction.
  • Clothing, laundry and dry-cleaning expenses - To legitimately claim the cost of a uniform, it needs be unique and distinctive, for example it contains your employer's logo, or is specific to your occupation, like chef's pants or coloured safety vests.
  • Gifts and donations - to organisations that are endorsed by the ATO as deductible gift recipients.
  • Home office expenses - Costs could include your computer, phone or other electronic device and running costs such as an internet service. You can only claim the proportion of expenses that relate to work, not private use.
  • Interest, dividend and other investment income deductions - Examples include interest, account fees, investing magazines and subscriptions, internet access, depreciation on your computer.
  • Self-education expenses - Providing the study relates to your current job, you can claim expenses like course fees, student union fees, textbooks, stationery, internet, home office expenses, professional journals and some travel.
  • Tools, equipment and other equipment - If you buy tools or equipment to help earn your income, you can claim a deduction for some or all of the cost. Examples include protective gear, including sunscreen, sunglasses and hats if you work outside, office equipment, safety equipment and technical instruments.
  • Other deductions - other items you can claim include union fees, the cost of managing tax affairs, income protection insurance (not if it's through super), overtime meals, personal super contributions and other expenses incurred in the course of earning an income.

Visit the ATO's website for more information on deductions you can claim.

Make it easier for next year

The ATO app has a tool called myDeductions that will make record keeping easier. The tool allows you to record deductions including work-related expenses, gifts and donations, interest and dividends. It also lets you store photos of receipts and record car trips. The myDeductions app can be used by individuals and sole traders (sole traders can use it to keep track of business income) and at tax time you can send your deductions to your tax agent or upload them directly to myTax.

What tax deductions are not allowed

The ATO is focused on helping taxpayers get their deductions right, but they're also on the lookout for red flags that identify people who are doing the wrong thing.

Here's a list of deductions you usually can't claim on your tax return.

  • Travel between home and work - which is generally considered private travel.
  • Car expenses - unless you are transporting bulky tools or equipment, that you need to do your job, that your employer requires you to transport, and there is no secure area to store the equipment at work.
  • Car expenses - that have been salary sacrificed.
  • Meal expenses - unless you were required to work away from home overnight.
  • Private travel - including any personal travel portion of work-related travel.
  • Everyday clothes - you bought to wear to work (for example, a suit or black pants), even if your employer requires you to wear them.
  • The cost of laundering eligible work clothes - unless you can show how you calculated the cost.
  • Higher Education Loan Program - contributions charged through the HELP scheme.
  • Self-education expenses - where there is no direct connection to your current employment.
  • Phone or internet expenses - that relate to private use.
  • Tools and equipment that cost more than $300 - however, you can depreciate the cost over a number of years.

Test your understanding of what you can and can't claim with the ATO's myDeductions quiz. If you are still not sure what you can or can't claim visit the ATO or a registered tax agent.

Lodging your tax return in 2017

You can lodge your tax return online using myTax - it's quick, easy, safe and secure. Visit the ATO website to find out how to lodge online.

If you have a spouse you will also need details of their income and expenses to make sure your entitlements are correctly calculated.

Once you have lodged your tax return keep an eye on your myGov inbox for your notice of assessment and tax receipt.

Smart tip

To lodge online, you will need to create a myGov account and then link it to the ATO.

Lodge your return before the deadline

If you are lodging your own tax return, you have until 31 October 2017 to lodge it. If you decide to use a registered tax agent, or are using a different agent to last year, you will need to contact them before 31 October.

Video: The ATO explains the best time to lodge with myTax

The best time to lodge with myTax video

Take a look at the ATO's video on lodging using myTax.

Transcript: The best time to lodge with myTax

Get help from a registered tax agent

If you want to use a professional to do your tax return, make sure you use a registered tax agent. You can check if the agent is registered on the tax and BAS agent register.

Whichever way you choose to lodge your tax return, remember you are responsible for the claims you make, so make sure your deductions are legitimate and you have included all your income before you or your agent lodges your return.

Make tax this year as easy as possible by getting organised and knowing what information you will need to lodge.


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Last updated: 18 Jul 2017