Getting the most out of your tax return
by Hamish McDouall, 2/08/07

Given that most of us are probably in the process of getting prepared to put in our tax returns for the 2006/07 financial year I thought I might review a couple of possible deductions which many of you may not be aware of.

It is very important to keep your receipts, statements and invoices throughout the year so as to be able to claim the maximum level of deductions possible. The easiest way to do this is by throwing all of your receipts in the old shoebox or in a file. You can then review the receipts at the end of the year for anything that may be claimable before giving your accountant (if your using one) the remaining receipts.

However, interestingly enough, even for those of you who haven’t been diligent in keeping records and receipts it is still possible to claim a number of deductions without written evidence. Here are a couple of items you might consider in this years tax return. 

Work Related Car Expenses

METHOD 1 – Cents per kilometre

• Your claim is based on a set rate (between 58c and 78c) for each business kilometre travelled depending on your engine size.
• You can claim a maximum of 5,000 business kilometres.

METHOD 2 – 12% of original value

• Your claim is based on 12% of the original value of your car.
• The value is subject to luxury car limits.
• Your car must have (or would have) travelled more than 5,000 business kilometres in the income period.

Whilst you do not need written evidence for either of the above methods you do need to be able to justify how the business kilometres travelled were calculated. For example, you may travel an average 20km round trip each week day for 50 weeks of the year for work related trips. Additionally, you also need to own (or be financially responsible) for your vehicle.

Getting to and from work is not classified as work related use, however any other travel related to work use is allowable for example; travel from work to seminars and meetings, to visit clients or if you are working two jobs for the kilometres travelled between the two jobs.

Other Work Expenses

Again, in addition to the above car related work expenses you can claim up to an additional $300 without written evidence for such expenses as:

• Uniforms, occupation specific clothing and laundry expenses;
• Self Education Expenses;
• Other expenses such as overtime meals, subscriptions to books, magazines and journals, telephone and home office expenses etc.

Other Deductible Expenses – evidence required

For many of the above deductions you are able to claim significantly more if you have the appropriate written evidence. In addition to the above, there are many other expenses that are claimable if you have written evidence some of which may include;

• Gifts or Donations to eligible organisations;
• Cost of managing your tax affairs;
• Carried forward capital losses from previous years can be used to offset current capital gains;
• It is important to ensure any dividends or managed fund distributions are entered correctly to ensure you are getting the most out of any; franking credits, deferred tax income or capital returns you may have received.

Depending on the complexity of your tax affairs you may be able to complete your own tax return, using the ATO’s e-tax website (www.ato.gov.au/etax/ ). If you have any concerns or are unsure of what you are eligible to claim it is recommended that you consult with an accountant or tax agent. NOTE: Your Hudson Financial Adviser is NOT a registered tax agent. As can be seen above, by using the services of a professional and understanding what eligible deductions exist you may be able to claim far more than you thought.