How to get a maximum tax refund

how to get a maximum tax refund

Understanding Tax Refunds Terminology

First it is important to understand the difference between tax terminologies and to know what is it that you, as an individual or business, qualify for in terms of tax refunds or tax return.

A tax refund, also known as a tax rebate, is essentially a refund paid for taxes whenever the tax liability is less than the taxes paid. This means that throughout the financial year, if an individual has been taxed from their income tax more than the total amount of refundable tax credits that they can claim. Additionally, a tax refund can occur when the total amount of withholding is less than the amount of income tax paid.

Whereas a tax return is the actual form and process through which an individual or business will outline their income, all tax withheld, any deductions or tax offsets that have occurred throughout the financial year.

In terms of a tax return for an individual, it is important to lodge a tax return if you paid tax during the financial year or if your taxable income exceeded set amounts regarding your financial situation including Centrelink allowances or payments.

What to put into your Tax Refunds form

There are many factors and costs that can be claimed on a tax form that people may not be aware of, meaning they may not be receiving their full tax return or tax refund.

There are several areas that are often neglected when it comes to claiming tax including working from home, car expenses and holiday costs associated with work, education and investment properties.

Working from home is a popular option for many Australians, although there are significant costs that can arise from this work setup such as phone bills, electricity and supplies. Claiming costs in your tax returns or tax reforms that are associated with working from home will have several restrictions and requirements in order to be a legitimate claim. This includes actually having an office established such as a separate room that is used solely for work purposes.

Work trips and business holidays are a common occurrence in many industries, although much of the bill may actually be paid by the individual themselves. In order to claim such expenses

it is advised that a diary is kept to show that the bulk of a trip was preoccupied with work activities. Additionally, this can relate to petrol and maintenance costs associated with car usage when used for work.

Education claims are a wide and varied part of the Australian taxation system, with self-education often being an undervalued and underused source of claiming on an individual's tax return or tax reform. Costs of self-education that directly relate to a person's employment or business are tax deductible.

In terms of investment properties, Australians are one of the leading countries when it comes to people investing in real estate with many of the costs being tax deductible within the Australian taxation system. Some of these investment property costs include declaring the gross amount of rent earned from an investment property, claiming any agent's commission or fees on your tax return, and claiming any profits for investment sales although there are limitations to what amounts can be claimed on a tax return or tax reform.

Furthermore, many Australians with investment properties are not aware that depreciation can be claimed on a standard tax form submission. In fact, the Australian Taxation Office has pre-established calculated depreciation rates for most items associated with rental properties which you can used to claim on any investment properties.

Getting Help with your Tax Refunds

If this all seems too complicated to understand there are several avenues that people can use to successfully lodge a tax return or tax refund including using a tax agent, using either the Australia Taxation Office's phone or internet options or through a Taxpack which is available at most newsagents or tax-office outlets.

There are pros and cons of each of these options and your confidence in using the tax system should dictate which you chose, this is especially important for those with complicated income systems with multiple claims on their tax returns or tax refunds.

Using a tax agent is the most expensive option but is ideal for those who need to retain copies of their taxation claims over several years and have fairly complicated income structures. However, the free online tax lodgment forms are straightforward and easy-to-use for those with simple tax return claims with minimal deductions.

Source: www.taxrefunds.com.au

Category: Taxes

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