For many Australians, tax season can mean a tax refund, and it can feel like finding money you didn’t know you had. For some, the tax refund can be as high as $4,531. How do you know if you’re eligible, and what do you need to do to claim it. In this article, it will be explained as simply as possible.
Who Gets a Tax Refund?
If you paid more tax than you owed for the year, you might just be eligible for a tax refund. That can happen when: You had too much tax money withheld from your salary. You might have worked more than one job or changed jobs, and it might appear you were taxed at a higher rate than necessary. That is because you were taxed at the job level, and your employer only looks at one job and does not consider your total income from other jobs.
You claimed work-related tax deductions. The tax system will recognize home office expenses, uniforms, and travel costs as legitimate deductions. You can claim deductions for the tools of your job, and they can substantially lower your tax bill. The ATO allows you to claim deductions for expenses related to earning your income.
You claimed superannuation contributions, and you have private health insurance. Refunds can come if you boost your concessional super contribution or use your private health insurance rebate. In Australia, the average tax return is $2,800, and with the right circumstances, tax returns can exceed that substantially. It is possible to reach $4,531 with proper deductions and significant PAYG over-withholding.
How to Get Your Tax Refund
Getting your tax refund is easy with the ATO. Here’s how:
Lodge your tax return. You can do this through myGov using the ATO’s online services, or through a registered tax agent. Most Australians can lodge from 1 July every year after their employer has finalised their income statement. Collect your documents. It is helpful to have your payment summaries, any deduction receipts, and any statements related to investment income and government payments. Much of this is pre-filled by the ATO.
Carefully consider your deductions. Only claim what you are entitled to. The ATO has advanced systems in place to monitor false claims, and getting it wrong could result in penalties or an audit. Finalise and wait. Most electronic returns are processed within a 2-week window. There can be a variation on the processing times of tax agents returns depending on their lodgement schedule.
Common Deductions That Boost Your Refund
Want to maximize your return? Here are some deductions that are easy to overlook:
Work-related vehicle expenses, uniforms, and protective clothing, self-education expenses for your current job, and expenses to maintain a home office are all deductible. Tools and equipment, union and professional membership dues, and for outdoor workers, sunscreen and sunglasses are all deductible as well. Make sure to keep documentation to substantiate your claim. Receipts, bank statements, and log books should guide your records for the year.
Tax Refund
Not everyone will get a tax refund of $4,531, and knowing one’s position will help maximize legal deductions within one’s reach. Keeping records throughout the year and claiming your justifiable deductions — no more and no less — will help get as close to that amount as possible. Don’t miss out on a tax refund. If you file on time and claim all the deductions you are entitled to, you will likely get a tax refund that will help you get through winter.
