We file our income tax returns or ITR every year but unfortunately, many people do not have proper knowledge about how the method of claiming tax refund works. You are eligible for receiving ITR when you start paying more taxes to the government than exact tax liability. This generally happens when the self-assessment tax or advance tax of a taxpayer is greater than the actual tax liability of the taxpayer. Let’s take a closer look at 4 vital tips to maximize your income tax refund in Hobart.
1. Claim all The Deductions
Tax deductions are the prevalent and easiest way for getting a tax refund is to claim a deduction for any expense. These expenses include:
- Travel and vehicle expenses
- Clothing, dry-cleaning and laundry expenses
- Mobile phone, home phone, and internet expense
- Self-education expenses
- Overtime meals
- Tools and equipment expenses
- Other work-related deductions
2. Save Your Receipts
At tax time, we generally spend tracking down receipts for any purchase that is made over the years. This is a waste of time and also a big loss of thousands of dollars in a tax refund. So, you need to make folders and save every receipt.
- When you make an expense, keep your receipt in the tax folder.
- If you prefer to work from home, you need to save all invoices for the power, phone, internet, water & office supplies. You should keep a diary where you can save all the track records and how much time you spend working at home.
- If you have already invested an amount of money in a property then definitely keep the related receipts of your payments.
- Donated to an NGO or charity? Put all the receipts into your folder. Also, you should write down your all-important dates in a diary or logbook.
If you don’t know whether your expenses are deductible or not, you need to save that too! A professional tax consultant can be able to advise you.
4. Prepay Your Bills
While it is very convenient for paying your bills monthly or weekly, it’s better if you pay any bill in a lump sum. Since you can claim a tax deduction this year for all expenses which relate totally to next year, it not only helps you to reclaim the expenses earlier but also you will receive a big refund in this present year.
These 4 tips will surely help you to increase your ITR. For proper guidance, you should opt for a tax advisor. He or she can always prepare your tax bills and keep you updated every time.
Related:
Do You Need to Lodge A Tax Return in Australia When Living Overseas?
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