With the 2023-24 financial year now over, Australian residents and businesses are preparing all the necessary documents and receipts to try and maximise their tax returns while avoiding audit scrutiny. This is especially important as the new tax cuts that have come into effect as of July 1, meaning most Australians will be paying less tax going forward. So, making the most of trying to maximise your potential refund this tax period under the old taxation brackets is crucial for all, given the current cost of living crisis. This blog looks into practical solutions for achieving these objectives, relying on expert guidance from Calibre BA the leading accounting firm in Sydney, Australia.
By utilising our professional service, the team at Calibre BA can help you maximise your tax return and assure compliance with Australian Taxation Office (ATO) standards, reducing the risk of audit. Whether you are an individual taxpayer or a business owner, these strategies can help you confidently and precisely manage the tax system’s intricacies to achieve a favourable tax outcome.
Understanding Tax Deductions and Allowable Expenses
Legitimate tax deductions are one of the best strategies to help maximise your tax return. Individuals can claim work-related expenses such as professional memberships, home office expenses (if applicable), office stationery, work uniforms and direct travel costs linked to their job. To prevent audits, it is critical to follow the Australian Taxation Office’s (ATO) standards.
Key Tips:
- Keep detailed records: Although you can claim up to 300 of deductions without needing to provide proof, it is best tokeep detailed records of all costs and receipts. This not only assists with proper deduction claims, but it also acts as documentation in the event of an audit.
- Claim only What’s Allowable: While it is tempting to claim every item, make sure they are clearly tied to your income-earning activities and fall within the ATO’s permissible limits.
Beyond Deductions: Additional Strategies
Optimising your tax return involves more than just deductions. Consider the following additional strategies:
- Maximise Superannuation Contributions: Voluntary contributions to your super fund can be tax-deductible. This not only reduces your taxable income but also boosts your retirement savings.
- Review Investment Portfolios: Capital losses incurred from selling certain assets such as rental properties and shares can be offset against capital gains, potentially reducing your tax liability. Consider consulting a financial advisor to ensure these decisions align with your investment goals.
Business Considerations for Tax Optimisation
Businesses in Australia have additional tax considerations, including:
- Maintain Business and Personal Finances Separate: Intermingling business and personal transactions can raise red flags for the ATO. Dedicate separate bank accounts and credit cards for business expenses.
- Claim Business-Related Expenses: Similar to individuals, businesses can claim deductions for legitimate operating expenses like rent, utilities, marketing costs, and depreciation on assets.
- Understand Depreciation Rules: The ATO outlines specific depreciation schedules for business assets. Understanding these rules allows you to claim depreciation accurately and avoid over-claiming.
Don’t Rely Solely on Pre-filled Data from the ATO.
You can pre-fill a lot of your income information directly from the ATO’s system. However, do not assume that all financial data is accurate or complete. Many third parties, such as banks, do not provide information about you to the ATO until late July or early August, meaning those who lodge their tax returns early and who utilise the ATO’s myTax system may find a significant amount of data missing from their pre-fill.
If you exclude income and are questioned by the ATO, the legal burden falls on you, even if you obtained the information directly from the ATO’s systems. Most tax accountants will work with their own source papers rather than pre-filled data. This reduces the likelihood of missing income data for those who choose to file early.
Seeking Professional Tax Advice
The Australian tax landscape can be intricate, and navigating it alone can be daunting. Consider seeking professional advice from a reputable accounting firm and how it can benefit you:
- Expertise and Guidance: Qualified accountants possess in-depth knowledge of Australian tax regulations, ensuring you claim all eligible deductions and comply with reporting requirements.
- Reduced Audit Risk: An experienced accounting firm can identify potential audit triggers and guide you towards practices that minimise the risk of ATO scrutiny.
- Peace of Mind: Letting a professional handle your tax affairs allows you to focus on running your business or managing your finances with greater confidence.
Calibre BA: Your Trusted Accounting Partner in Sydney
Here at Calibre BA, a renowned accounting firm based in Sydney, Australia, we provide full tax and business advisory services. Our certified accountants offer personalised solutions to assist individuals and corporations in optimising their tax returns while remaining compliant with ATO laws.
Our services include:
- Individual Tax Return Preparation and Lodgement
- Business Tax Planning and Compliance
- Financial advice for Self-Managed Superannuation Funds (SMSF)
- Tax Audit Representation
Working with an accredited accounting firm allows you to negotiate the complexity of the Australian tax system more easily and confidently. Our accountants are committed to delivering specialised advice and support, ensuring that you maximise your tax returns while remaining fully compliant with all applicable requirements.
Ensure Tax Compliance with Calibre BA
Maximising your tax return in the 2023/2024 financial year requires a strategic approach that balances proactive tax planning with compliance. By engaging with Calibre BA and our business advisory services in Sydney, our team can help you get the most out of your tax return while keeping the ATO off your back. By staying informed, keeping all receipts of items you wish to claim a deduction on, and seeking professional advice are key to achieving financial efficiency while safeguarding against any possible audits.