Quick tax moves for a bigger 2024 refund, but don’t rush your return

June 30 is just days away and time is running out for quick tax deductions, but after July 1 it will pay to be patient. Here’s why.

Technology has taken over from shoeboxes when it comes to getting your annual tax return done, but this has not led to faster refunds.

In fact, the old tradition of collecting receipts in boxes and filing tax returns immediately after July 1 is no longer recommended because of the Australian Taxation Office’s electronic pre-filling of people’s returns and its high-tech data-matching and surveillance.

However, with just four days left this financial year, there are still some last-minute moves to make to collect a bigger tax refund.

The ATO this week warned people to wait a few weeks before filing their tax return, to allow its electronic pre-filling to finish.

It says most information from employers, banks, government agencies and health funds will be automatically loaded into our tax returns by late July.

TAKE YOUR TIME

“Tax time is not a race, and there is a much higher chance that your return will be missing important information if you lodge in early July,” ATO assistant commissioner Rob Thomson says.

“We see lots of mistakes where people who rush to lodge early have forgotten to include interest from banks, dividend income, payments from government agencies and private health insurance details.”

Susan Franks from Chartered Accountants Australia and New Zealand. Picture: Supplied

Last year the ATO changed almost half a million tax returns after finding mistakes, and more investigations and audits await for those who deliberately get it wrong.

Waiting to lodge doesn’t mean waiting to act, because taxpayers have just four days to use tax deductions to generate a bigger refund or reduce a looming tax bill.

Chartered Accountants Australia and New Zealand senior tax advocate Susan Franks suggests paying for last-minute work-related expenses such as subscriptions and membership fees before June 30.

“Remember you have to incur the cost without being reimbursed by your employer to claim a deduction, you can only claim costs related to your work not your personal life, and you have to keep records so you have proof of what you’re claiming,” Franks says.

“The benefits of the Stage 3 tax cut won’t apply to this year’s tax return, so it is worth considering in the final days of the financial year, whether you can increase your tax-deductible expenses before 30 June and/or delay receipt of some income, for example by delaying a sale, until after July 1 so it is taxed at a lower rate.”

Working from home is part of many people’s lives, and some last-minute spending can boost a tax refund.

“There are still two ways of calculating working from home deductions – claiming 67c per hour you worked from home, or claiming actual costs,” Franks says.

HOME DEDUCTIONS

H&R Block director of tax communications Mark Chapman says deductions for costs arising from working from home can include heating, cooling, lighting, cleaning, computer consumables, stationery, phone and internet, depreciation of home office furniture and printer supplies.

Accountants say claiming actual costs usually delivers more deductions than the simpler 67c-per-hour method.

“You can claim actual costs but you’ll need copies of all invoices plus a reasonable estimate of the percentage split between work-use and private-use,” Chapman says.

Some smart spending now could boost this year’s tax refund by plenty. Picture: iStock

Those claiming the 67c per hour fixed rate method “must be able to prove the number of hours that you worked from home during the entire tax year, so you’ll need a diary, copies of time sheets or rosters”, he says.

Large items such as computers must be depreciated over a few years, so buying a new laptop on June 30 won’t give workers a deduction for 2023-24.

Chapman says people can consider paying for things such as union fees or annual income protection insurance premiums “to accelerate the deduction”.

And don’t forget charitable donations. “You can claim a deduction for donations of more than $2 to a registered charity provided you have a receipt for the donation,” Chapman says.

LAST-MINUTE MOVES

There’s still time for some tax-deductible spending before June 30, including:

• Donations to charities

• Home office supplies such as stationery and printer ink

• Prepay work-related expenses such as professional subscriptions and conference fees

• Annual income protection insurance premiums

• Prepay interest on investment loans, or sell loss-making investments to offset capital gains

Originally published as Quick tax moves for a bigger 2024 refund, but don’t rush your return